Emerging-market stocks fell after reports showed China’s growth slowed in the fourth quarter while factory output and business spending trailed estimates. Turkey’s lira slid to an all-time low.
The MSCI Emerging Markets Index dropped 0.1 percent to 970.82 in New York as 438 stocks declined and 342 rose. The Shanghai Composite Index sank below 2,000 for the first time in almost six months. The lira slumped for a sixth day versus the dollar following weekend protests and Malaysia’s ringgit depreciated 0.7 percent to a four-month low. The Ibovespa fell to the lowest in five months while Dubai’s stock index surged to a five-year high.
Chinese gross domestic product expanded 7.7 percent in the fourth quarter, compared with 7.8 percent in the previous three months, the National Bureau of Statistics said today. Industrial production rose 9.7 percent in December from a year earlier, versus a 9.8 percent median forecast of analysts and a 10 percent gain in November. Fixed-asset investment increased 19.6 percent last year, slowing from a 20.6 percent pace in 2012.
“It’s the Chinese data, which confirms the slowdown in fixed-investment growth, and the continuous pressure on capital flows to the emerging world,” Maarten-Jan Bakkum, an emerging-markets strategist at ING Investment Management Co. in The Hague, said by e-mail. “Downside risk remains high on the currency side.”
Any deeper slowdown in the Chinese economy would test leaders’ willingness to implement the broadest policy shifts since the 1990s and tackle debt-fueled investment, after President Xi Jinping scrapped a goal of “relatively fast” growth in his first year in power. The world’s second-largest economy may expand at the weakest pace in almost a quarter century in 2014, a survey showed last month, as spending on infrastructure and factories moderates.
The MSCI emerging-markets gauge has declined 3.2 percent this year and trades at 9.2 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index of developed nations has slipped 0.2 percent this year and is valued at 14.8 times.
The Shanghai Composite lost 0.7 percent to 1,991.25, the lowest close since July 30. Stocks also slid as concern grew new share offerings will divert funds. Eight companies will start trading in Shenzhen tomorrow. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong dropped 1.3 percent to the lowest close since Aug. 30.
The Ibovespa sank 1 percent to the lowest close since Aug. 7. Iron-ore producer Vale SA declined 2.8 percent on news of the slowing growth in China, Brazil’s top trading partner, and Usinas Siderurgicas de Minas Gerais SA slid 2.2 percent.
India’s S&P BSE Sensex Index of shares advanced 0.7 percent and Russia’s Micex Index added 0.6 percent.
Haier Electronics Group Co. tumbled 6.5 percent, the most since Aug. 29 and the largest percentage loss in the MSCI Emerging Markets Index. Carlyle Group LP offered to sell 100 million shares in Haier, Reuters reported. Two block trades of a combined 100 million shares crossed today at HK$22.1 a share, lower than Friday’s $24.45 close, data compiled by Bloomberg show.
The lira weakened 0.3 percent after reaching a record for the sixth time this year. At least 12 people were detained and police used tear gas and water cannon to disperse crowds in Istanbul amid weekend protests against a proposal making it easier to ban websites. Prime Minister Recep Tayyip Erdogan’s ruling party says it’s fighting a concerted attempt to overthrow it, while protesters say he’s attacking the judiciary to further centralize power and kill a graft investigation.
Ukraine’s credit default swaps, the cost of insuring the nation’s debt against non-payment, gained 23 basis points to 718 basis points as anti-government protests in defiance of new laws flared up, spurring investor concern that political stability is being compromised.
The Ukrainian Equities Index slid 2.8 percent to 895.02 in Kiev, the first drop in three days.
The Dubai Financial Market General Index advanced for an eighth day, adding 1.5 percent to the highest close since October 2008. Gulf Finance House EC climbed 9.6 percent to the highest in more than 22 months after the investment company said it signed an agreement with a group of British investors to sell 75 percent of its stake in Leeds United Plc.
Eight of the 10 industry groups in the developing-nation gauge declined today, led by telecommunications and financial shares. LG Uplus Corp. fell 3.2 percent in Seoul after Samsung Securities Co. cut its price target to 14,600 won from 16,000 won.
Acer Inc., a Taiwanese personal computer maker, slid 4 percent in Taipei, the most in two months, as the company reported a record annual loss.
Thailand’s SET Index retreated 0.4 percent. The risk of Thailand defaulting on its debt is the highest since August as anti-government protests prompt money managers to sell the nation’s assets. At least 28 people were injured as two explosions rocked a protest site in Bangkok yesterday, adding to almost daily attacks as groups push to oust Prime Minister Yingluck Shinawatra and derail a Feb. 2 election.
Vietnam’s VN Index rose 1.9 percent, the highest close since November 2009. The gauge jumped 22 percent in 2013 as inflation eased, the government purchased bad loans from banks and investors speculated policy makers will reduce restrictions on foreign investors.