Most Emerging Stocks Advance on Fed Market View as China Slumps
Most emerging-market stocks advanced as the U.S. Federal Reserve’s assessment that strains in global markets have eased outweighed concern that China may keep property curbs in place longer than anticipated.
About two shares gained for each that fell as the MSCI Emerging Markets Index closed little changed at 1,066.83 in New York, the highest level since March 2. Turkey’s ISE National 100 Index (XU100) gained 2.4 percent, while gauges in South Korea, Taiwan, Poland and Hungary rose at least 1 percent. Samsung Electronics Co. (005930) jumped to a record after an analyst said it will supply the touch screen for Apple Inc.’s new iPad. China’s Shanghai Composite Index (SHCOMP) sank 2.6 percent.
Strains in global financial markets have abated and the labor market is strengthening, the Fed said yesterday. Most of the nation’s largest banks could maintain adequate capital levels even in a recession, the central bank said separately. The Shanghai index fell after Premier Wen Jiabao said easing constraints on the property market would lead to “chaos.”
“People have been very optimistic, and I think too optimistic about the prospect for easing, especially in China,” John-Paul Smith, a London-based emerging-market strategist at Deutsche Bank AG, said by phone. “What we’re likely to see is the government trying to move to a more sustainable path to growth.”
A gauge tracking Chinese property stocks in Shanghai sank 3.7 percent today, while Anhui Conch Cement Co. (600585), the nation’s biggest maker of the building material, fell 3.3 percent.
Emerging-market stocks have gained 16 percent this year, compared with a 10 percent advance for developed-country shares on the MSCI World Index.
Samsung Electronics, South Korea’s largest consumer electronics exporter, jumped 2.4 percent after Vinita Jakhanwal, a senior manager at research company iSuppli Corp., said the company will supply the touch screen for Apple Inc.’s new iPad. Steve Park, a Seoul-based spokesman for Apple and Jason Kim, a spokesman for Samsung also in Seoul, declined to comment.
Brazil’s Bovespa Index (IBOV) lost 0.2 percent as homebuilder Brookfield Incorporacoes SA (BISA3) slid after reporting fourth-quarter profit that trailed analysts’ estimates. In Mexico, Industrias Penoles SAB, the country’s largest silver producer, fell 1.9 percent, as the IPC Index closed little changed.
The Micex Index advanced 1.2 percent in Moscow and the FTSE/JSE Africa All Shares Index (JALSH) rose 0.7 percent in Johannesburg.
Naspers Ltd. (NPN), Africa’s largest media group, rose 2.8 percent, its biggest advance in more than three months. Fourth-quarter profit for Shenzhen, China-based Tencent Holdings Ltd. (700), in which Naspers owns a 35 percent stake, rose 15 percent. Tencent is China’s biggest Internet company by revenue.
The iShares MSCI Emerging Markets Index exchange-traded fund, the most-traded ETF that tracks developing-nation shares, slid 1.6 percent in New York to $43.79, dropping for the second day this week.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell 13 basis points, or 0.13 percentage points, to 316 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.