Emerging-market stocks fell for a third day as investors weighed the minutes from the Federal Reserve’s last policy meeting for clues about the timing of increases in U.S. interest rates.
Hanergy Thin Film Power Group Ltd. plunged 47 percent in Hong Kong as the Chinese solar-equipment maker’s chairman skipped its annual meeting. The Ibovespa slid for a third day amid bets that Brazil could end a tax break for stocks. The Micex Index dropped to the lowest since March in Moscow and the ruble declined to a one-week low. Turkey’s lira rose after the central bank kept all its interest rates unchanged.
The MSCI Emerging Markets Index fell 0.5 percent to 1,036.10. While minutes from the U.S. monetary authority’s April meeting showed officials didn’t expect to raise interest rates next month, they confirmed the Fed’s statement that policy makers expect the economy to return to a “moderate pace” of growth after weakness in the first three months of the year.
“The emerging markets index didn’t move too much as the Fed minutes were in line with what the market has been expecting,” Jeff Bahl, a portfolio manager who helps oversee more than $7.9 billion at Bahl & Gaynor Inc., said by phone.
The emerging-market stock index has fallen 0.7 percent this week as traders boosted bets for an increase in the near-zero U.S. rates that have bolstered demand for riskier assets. Data on Tuesday showed new U.S. home-building at the highest level since 2007. A gauge of 20 developing-nation currencies dropped 0.2 percent, pushing it’s three-day decline to 1.3 percent.
The developing-nation stock gauge has gained 8.3 percent this year and is valued at 12.3 times 12-month projected earnings, data compiled by Bloomberg show. The MSCI World Index has risen 5.5 percent and is valued at a multiple of 16.8.
Brewer Ambev SA retreated 2.9 percent, contributing the most to a 1.1 percent drop in the Ibovespa.
Brazil is considering ending a tax break on equities as part of the government’s plan to cut spending, the newspaper O Estado de S. Paulo reported, without saying where it got the information.
Hanergy plunged to HK$3.91 before the stock was suspended. Chairman Li Hejun didn’t attend the annual meeting, T.L. Chow, its external spokesman, said by phone. The company said the suspension is pending the announcement of “inside information.”
Nine out of 10 industry groups in the MSCI Emerging Markets Index fell, as a gauge of raw-material companies sank 1.1 percent.
The lira rose 0.7 percent after policy makers kept the repo rate at 7.5 percent, in line with analyst estimates. The ruble fell for the second day.
The ruble declined 0.4 percent to 49.752 per dollar. Russia is offering the biggest tranche of its longest-maturity fixed-rate debt in seven months, tapping demand from investors seeking to lock in higher interest rates as the government and central bank sell rubles. The Micex Index slid 1.4 percent.
The Shanghai Composite Index rose to a two-week high as a gauge of technology shares jumped to a record on optimism state plans to boost the industry will lift profits. The Hang Seng China Enterprises Index climbed 0.3 percent.