Emerging-Market Stocks Post Longest Rout Since August on China
Emerging-market stocks fell for a fourth day, led by energy companies, on speculation China will expand a property tax trial and as European officials delayed a decision on Greek aid.
OAO Gazprom, Russia’s biggest company, sank to the lowest since May. Diagnosticos da America SA (DASA3) tumbled in Sao Paulo after reporting earnings that fell short of analyst estimates. Evergrande Real Estate Group Ltd. (3333) and Poly Property Group Ltd. (119) retreated in Hong Kong. The MSCI Emerging Markets Index (MXEF) lost 0.7 percent to 982.17 at the close of trading in New York, posting the longest stretch of declines since Aug. 30.
China’s housing ministry is on “high alert” if both transaction volume and home prices increase “substantially,” Xinhua News Agency reported, citing Minister of Housing and Urban-Rural Development Jiang Weixin. European leaders have put off until next week a decision on how to cover Greece’s additional funding needs, while giving the nation two years to bring down its budget gap.
“The situation in Europe continues to create an overhang for markets while reports on China’s property tax are adding to the pressure,” said Allan Yu, who helps manage $10.3 billion in Manila-based Metropolitan Bank & Trust (MBT) Co.
The developing nations stock measure has risen 7.2 percent this year, lagging a 7.5 percent increase in the MSCI World Index of developed countries. The emerging-markets gauge trades at 11.3 times estimated earnings, compared with the MSCI World’s multiple of 13.1, data compiled by Bloomberg show.
The iShares MSCI Emerging Markets Index exchange-traded fund, the ETF tracking developing-nation shares, slumped 0.9 percent. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index (VXEEM), a measure of options prices on the fund and expectations of price swings, increased 0.3 percent.
The MSCI Emerging Markets/Energy Index (MXEF0EN) and the MSCI Emerging Markets/Materials Index fell to the lowest level in two months as oil and commodities retreated for a second day.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose two basis points, or 0.02 percentage point, to 301, according to JPMorgan Chase & Co.’s EMBI Global Index.
Evergrande Real Estate tumbled 4.2 percent, while Poly Property lost 1.5 percent. The government imposed a property tax for the first time in Shanghai and Chongqing and raised down payment and mortgage requirements in its more than two-year effort to curb the property market.
PetroChina Co. plunged 8.5 percent while China Petroleum and Chemical Corp. slid 3 percent in Hong Kong trading after the Beijing Times said China may cut gas prices tomorrow. Gazprom tumbled 3.6 percent to the lowest since May 23.
Diagnosticos da America, the medical-diagnostics firm known as Dasa, tumbled 5.3 percent, the most since July. The company posted adjusted net income of 26.9 million reais in the third quarter, missing an average estimate of 41 million reais, according to data compiled by Bloomberg. Homebuilder Gafisa SA (GFSA3) gained 6.3 percent after posting third-quarter earnings that beat estimates.
Charoen Pokphand Foods Pcl (CPF) declined 6.3 percent in Bangkok, the most in four months, as UBS AG offered to sell shares at below market prices.
OAO Sberbank dropped in Moscow, retreating 2.7 percent. The ruble fell to the weakest level in two months.
New World Resources Plc (NWR) sank to the lowest since April 2009, losing 5.9 percent, as analysts estimate the Czech coal company will post its first quarterly loss since 2010 tomorrow.
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