Emerging-market stocks fell to a seven-week low and currencies in India and Turkey sank to records as speculation grew that the U.S. will take military action in Syria.
Stocks in the Philippines led declines as the benchmark index tumbled to an eight-month low on concern capital outflows will accelerate. OGX Petroleo e Gas Participacoes SA sank 17 percent, dragging Brazil’s Ibovespa to a three-week low. India’s rupee fell the most in two decades as a surge in oil threatened to worsen the current-account deficit, while Turkey’s lira slid a third day. Brazil’s real rose the most among 31 major currencies amid central bank’s intervention.
The MSCI Emerging Markets Index dropped 0.6 percent to 909.81, the lowest level since July 8. Rising tension in Syria has worsened a rout that erased more than $1 trillion from the value of developing-nation equities this year. Foreign investors pulled about $2.4 billion this month from markets in India, Indonesia, Thailand and the Philippines amid speculation that the Federal Reserve will reduce monetary stimulus.
“The tensions in the Middle East and the threat of imminent military action are casting a pall over the equity markets,” Alan Gayle, senior strategist at RidgeWorth Capital Management, said by phone from Atlanta. His firm oversees about $48 billion. “The global concerns about Syria and higher oil prices continue to weigh.”
Nine of 10 groups in the MSCI Emerging Markets Index fell today, led by health-care shares. The gauge of developing nations extended this year’s plunge to 14 percent, compared with an 11 percent advance for a measure of developed markets.
The iShares MSCI Emerging Markets Index exchange-traded fund rose 0.2 percent to $37.43. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, retreated 1.2 percent to 28.21.
Brazil’s real climbed to a two-week high amid central bank’s effort to support the currency. The Ibovespa retreated for a third day as OGX posted the biggest decline in the emerging-market benchmark measure.
The Micex Index slid for a fourth day as OAO Rostelecom, Russia’s biggest fixed-line operator, was downgraded at Bank of America Merill Lynch. Russia failed to sell any bonds at a weekly auction for the first time since June as yields rose to a two-month high.
The FTSE/JSE Africa All Shares Index fell 1.8 percent, the most since July 5. Discovery Ltd., South Africa’s largest medical-insurance provider, sank 9.1 percent after saying profit will be as much as 10 percent lower than the previous period.
The Philippine Stock Exchange Index dropped 3 percent, extending a monthly drop to 14 percent. SM Investments Corp., owner of the largest shopping-mall operator and biggest grocery chain, slid 7.5 percent to the lowest price since October. The Jakarta Composite Index rose 1.5 percent.
India’s S&P BSE Sensex rebounded from the lowest intraday level in almost a year as some traders closed bearish bets before derivatives contracts expire tomorrow. Reliance Industries Ltd., the owner of the world’s largest refining complex, gained 1.1 percent. The rupee slumped 3.9 percent to an unprecedented 68.8450 per dollar in Mumbai.
China’s stocks fell from a two-week high as PetroChina Co. dropped after four senior managers were removed amid a government anti-corruption campaign and drugmakers slid on concern earnings are trailing estimates.
The premium investors demand to own emerging-market debt over U.S. Treasuries slid 0.03 percentage point to 354 basis points, according to JPMorgan Chase & Co.