Most Emerging Stocks Drop as China Slowdown Outweighs Oil Rally

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Most emerging-market stocks fell amid concern that China’s economic slowdown is deepening, outweighing gains in energy companies as Brent crude rose for a fifth day.

Samsung Electronics Co. and Tencent Holdings Ltd. led declines in developing-nation technology companies, which dropped the most among 10 industry groups. The ruble advanced 2.4 percent as higher oil prices boosted the outlook for the world’s largest energy exporter. The Ibovespa gained 1.7 percent in Sao Paulo. The Turkish lira and the South African rand each dropped 0.4 percent.

The MSCI Emerging Markets Index was little changed at 1,036.87 with 404 stocks lower and 363 higher. China’s economy expanded at the weakest pace since 2009 last quarter, while March industrial production growth trailed all 40 estimates in a Bloomberg survey. The index rallied for 11 days through April 13, the longest run of gains in a decade on speculation the Chinese government will boost economic stimulus.

“We see a weak backdrop for emerging-market risk sentiment as weak Chinese data are dragging” stocks and currencies lower, Bernd Berg, an emerging-market strategist at Societe Generale SA in London, said by e-mail. “The rand is under selling pressure after yesterday’s relief rally.”

Turkey’s currency slid for a fifth day as a lack of clarity on the direction of economic policies following June elections added to pressure from the prospect for higher U.S. interest rates. The rand declined after climbing 1.1 percent yesterday.

Tech Slide

The developing-nation equities gauge has risen 8.4 percent this year and trades at 12.5 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has gained 4.3 percent in 2015 and is valued at a multiple of 17.

Seven out of 10 industry groups fell, as a technology gauge lost 1.3 percent. Tencent slid 2.2 percent to a one-week low. Samsung sank 1.9 percent, the most since March 26. Taiwan’s Taiex Index declined 1.1 percent as MediaTek Inc. dropped 4 percent and Hon Hai Precision Industry Co. lost 1.8 percent.

Cnooc Ltd. posted its longest rally on record in Hong Kong as the developing-nation energy index jumped 2 percent to the highest level since late November.

Brent crude climbed 3.2 percent to $60.32 a barrel. Petroleo Brasileiro SA, Brazil’s state-run oil producer, rose 6.7 percent to the highest since November, while the Russian natural-gas producer OAO Gazprom advanced the most in two months. The jumped advanced 1.7 percent in Sao Paulo.

“The advance in crude prices is definitely beneficial for a lot of emerging markets that are positively leveraged to crude prices,” Timothy Ghriskey, the chief investment officer at Solaris Asset Management LLC in New York, who helps manage about $1.5 billion in assets, said by phone.

China Growth

The Hang Seng China Enterprises gauge rose for the ninth time in 10 days as Industrial & Commercial Bank of China Ltd. advanced 4.9 percent. The Shanghai Composite declined 1.2 percent.

China’s economy expanded 7 percent in the first quarter from a year earlier, in line with the government’s full-year target. The nation’s industrial production grew 5.6 percent in March, missing the lowest forecast in Bloomberg’s survey of 40 economists, data Wednesday showed.

Alibaba Health Information Technology Ltd., a subsidiary of China’s biggest e-commerce operator, surged 81 percent to a record in Hong Kong on plans to buy an affiliate’s online pharmacy business in a $2.5 billion deal.

Saudi Arabia’s Tadawul All Share Index advanced 2.2 percent and Dubai’s DFM General Index surged 3 percent, the most since Feb. 1. Dubai Islamic Bank PJSC rallied 5.3 percent, its biggest gain since Dec. 21, after first-quarter profit grew 34 percent from a year earlier.

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