Most Emerging-Market Stocks Decline as Ibovespa Plunges
Brazil’s stock index fell to the lowest level since August 2011 as papermaker Klabin SA tumbled on plans to sell securities. Egypt’s shares slid into a bear market after MSCI Inc. said it may review the nation’s emerging-market status. The Borsa Istanbul Stock Exchange National 100 Index snapped a two-day plunge, led by banks. Indonesia’s stocks gained as PT Unilever Indonesia ended a four-day tumble.
The MSCI Emerging Markets Index was unchanged at 954.38, as 322 stocks fell while 190 rose. The gauge slid 8.9 percent since May 22, when Federal Reserve Chairman Ben S. Bernanke said the central bank could pare its bond purchase program if employment showed improvement.
The tapering in stimulus “is bound to happen at some point,” Nick Robinson, who helps manage $322 billion at Aberdeen Asset Management, said in an interview in New York. “It’s less liquidity going around in the market. That has had some impact on markets.”
Industrial, utility and commodity shares led losses among 10 groups in a measure of developing-nation stocks. The broad gauge dropped 9.6 percent this year, compared with a 8.9 percent jump in the MSCI World Index.
The iShares MSCI Emerging Markets Index exchange-traded fund slid 0.7 percent to $39.11. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, rose 6.5 percent to 27.98.
Brazil’s Ibovespa fell for a fourth day amid concern that government measures to spur growth and tame inflation won’t be enough to rekindle Brazil’s economic recovery. Papermaker Klabin tumbled 9.6 percent. OGX Petroleo & Gas Participacoes SA sank 11 percent.
Mexico’s IPC Index slumped 1 percent as Grupo Financiero Banorte SAB (GFNORTEO), the nation’s third-largest bank, tumbled on plans to raise as much as $3 billion in the market’s biggest stock offering of the year as the company expands through acquisitions.
Turkish shares gained after plunging 4.2 percent over the previous two days. Akbank TAS (AKBNK) and Turkiye Garanti Bankasi AS rose at least 1.9 percent. The nation’s central bank Governor Erdem Basci stepped in to shore up the lira amid anti-government protests, seeking to curb a selloff spurred by concern policy makers are preparing to scale back stimulus.
The Jakarta Composite Index jumped 1.9 percent, rebounding from its lowest level since Feb. 19 and paring its decline from a May 20 peak to 9.9 percent. PT Astra International jumped 7.5 percent and PT Unilever Indonesia (JCI) soared 9.5 percent.
Egypt’s EGX 30 Index tumbled 5.2 percent, the most since November. The measure, the worst performer today among 94 indexes tracked by Bloomberg, has fallen 23 percent since a Sept. 26 peak. MSCI said it “may be forced” to consider excluding Egypt from its emerging-market indexes if a foreign currency shortage were “to worsen and result in the inability of international investors to repatriate their funds.”
Greece became the first developed nation to be cut to emerging-market status by MSCI after the local stock index plunged 83 percent since 2007. Qatar and the United Arab Emirates were raised to emerging markets, while Morocco was cut to a frontier market. New York-based MSCI kept South Korea and Taiwan as emerging markets, and placed Chinese shares traded on local exchanges on review for inclusion in the emerging category, according to a statement yesterday.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell 10 basis points to 327 basis points, according to JPMorgan Chase & Co.’s EMBI Global Diversified Index.