Emerging-market stocks fell for a sixth straight day, trimming the steepest monthly gain since January, as the Federal Reserve refrained from indicating when it will reduce the pace of its bond buying program.
The MSCI Emerging Markets Index dropped 0.6 percent to 947.55, capping the longest slide since April. Homebuilders PDG Realty SA and Gafisa SA paces losses in Brazil’s Ibovespa, while the real rebounded from a four-year low. Turkish shares led losses among major emerging-market indexes as banks tumbled. Desarrolladora Homex SAB surged 32 percent in Mexico after a government minister pledged support for developers.
The Fed repeated the pledge it has used since September that it will continue the purchases until the U.S. labor market outlook has improved substantially. The benchmark measure for emerging markets has slumped 9.6 percent since May 22, when the U.S. central bank first signaled its asset-buying program could be cut if the economy showed sustained improvement. The iShares MSCI Emerging Markets ETF, which briefly erased losses after the Fed’s statement, dropped 0.6 percent to $39.01.
“I don’t know if this is sufficient to turn them around,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management which oversees $180 billion, said by phone. “The emerging markets have done very poorly since the Fed has started talked talking about tapering. There wasn’t that much of a change.”
The MSCI Emerging Markets Index has risen 0.8 percent this month, led by energy shares, while stocks of consumer-staple and financial companies retreated. The MSCI World Index of developed markets has jumped 5.2 percent for the month.
The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, rose 0.2 percent today to 23.26.
Brazil’s Ibovespa dropped a third day as PDG and Gafisa declined at least 6.1 percent. The measure pared this month’s gain to 1.6 percent. The real appreciated 0.3 percent, erasing earlier losses. Mexico’s IPC index gained 1.5 percent as Homex surged from a record low.
Russian equities pared their advance for the month as OAO Uralkali slumped after HSBC Holdings Plc and Credit Suisse Group AG cut the the largest potash producer to sell and its chief executive officer reiterated a plan to increase volumes.
The Borsa Istanbul Stock Exchange National 100 Index gauge slumped as Akbank TAS and Turkiye Garanti Bankasi AS retreated at least 2.8 percent. Benchmark gauges in Poland, Hungary and the Czech Republic advanced.
China’s stocks rose, capping gains for the benchmark index this month, as real-estate developers, cement companies and household-appliance makers rallied on speculation the government may loosen property curbs. China Vanke Co. and Poly Real Estate Group Co. drove a gauge of developers to the biggest rally among industry groups.
Malaysian stocks fell the most in almost seven weeks, the ringgit slumped and bonds extended losses after Fitch Ratings cut the nation’s credit outlook, citing rising debt levels and a lack of budgetary reform.
Celltrion Inc. jumped to a record in Seoul on bets the South Korean maker of biological drugs may be bought by AstraZeneca Plc. Celltrion spokesman Kim Joon Seok declined to comment, while AstraZeneca’s spokeswoman Ayesha Bharmal said the company doesn’t comment on market speculation.
The premium investors demand to own emerging-market debt over U.S. Treasuries rose 0.03 percentage point to 323 basis points, according to JPMorgan Chase & Co.