Emerging-market stocks retreated for a seventh day as talks continued to avert a Greek default and investors awaited the release of more economic data to gauge the potential timing of a U.S. interest rate increase.
The MSCI Emerging Markets Index fell 0.3 percent to 999.87. India’s S&P BSE Sensex tumbled 2.4 percent on concern Tuesday’s interest-rate cut won’t be enough to spur growth. Hyundai Motor Co. sank to a four-year low after reporting lower sales as the Kospi Index slid a second day. The Ibovespa rose as Brazil’s industrial production contracted less than forecast. The Shanghai Composite Index climbed 1.7 percent.
The stalemate in Greece sowed confusion as the government and creditors drew up rival proposals for a financial lifeline. Developing-nation stocks have slipped to a one-month low amid speculation stronger economic data may clear the way for the Federal Reserve to raise near-zero U.S. interest rates that have boosted demand for riskier assets. Manufacturing data Monday bolstered the case for the first increase since 2006. A report Friday is expected to show job creation increased in May.
“Markets are generally nervous,” Simon Quijano-Evans, the head of emerging-market research at Commerzbank AG in London, said by e-mail. “It is difficult to position for any surprise out of Greece, while emerging markets are just waiting for the Fed to hike.”
Eight of 10 industry groups in the MSCI Emerging Markets Index retreated, led by consumer discretionary companies. The index has gained 4.6 percent this year and trades at 12 times projected 12-month earnings, according to data compiled by Bloomberg. The MSCI World Index of developed-nation stocks has risen 4.3 percent in 2015 and is valued at a multiple of 16.7.
The Reserve Bank of India lowered its repurchase rate to 7.25 percent from 7.5 percent and said it would wait to assess monsoon rains before acting again. The nation’s government bonds and the rupee fell as the RBI’s outlook disappointed investors looking for more cuts to boost the economy.
Hyundai Motor sank 10 percent after the Korean carmaker’s domestic sales fell for a second month. Shares of its affiliates Hyundai Wia Corp. and Hyundai Mobis Co. tumbled at least 8.5 percent. Hotel Shilla Co. led tourism shares lower after South Korea confirmed two people died from the Middle East respiratory syndrome. The Kospi index lost 1.1 percent.
Iron-ore producer Vale SA rallied 7.5 percent, leading a 2.3 percent gain in the Ibovespa. Brazilian stocks rose after data showed industrial production declined 1.2 percent in April from the previous month, less than the 1.4 percent contraction economists surveyed by Bloomberg had forecast.
Amlak Finance PJSC closed unchanged on its first day of trading in Dubai following the longest suspension in the market’s history. Trading in the Islamic mortgage provider was halted six-and-a-half years ago before the United Arab Emirates’ government intervened to rescue Amlak from insolvency.
The Shanghai Composite rose 1.7 percent, extending Monday’s 4.7 percent climb, while the Hang Seng China Enterprises Index of mainland shares traded in Hong Kong dropped 0.7 percent.
Russia’s ruble strengthened 1.6 percent against the dollar as Brent crude traded above $65. A gauge of developing-nation currencies added 0.6 percent, rising from a two-month low.
The premium investors demand to own emerging-market debt over U.S. Treasuries narrowed five basis points to 333 basis points, according to a JPMorgan Chase & Co. index.