Emerging Stocks Fall Most in Week on Metals, China Retail Sales

Emerging-market stocks fell the most in a week, led by a decline in Chinese companies as retail sales growth slowed during the Lunar New Year festival and a drop in mining shares as metal prices slumped.

Daphne International Holdings Ltd., a Chinese footwear maker, sank the most in five weeks to lead consumer stock declines. Retailer B2W Cia. Global do Varejo dropped the most on Brazil’s Bovespa Index after economists reduced their 2014 growth forecasts for the country. Steelmaker OAO Severstal fell for the first time in four days in Moscow. Anglo American Platinum Ltd. slid the most in a month in Johannesburg after a report of clashes between labor unions at a company mine.

The MSCI Emerging Markets Index fell 0.2 percent to 1,064.34 in New York, snapping four days of gains. The gauge’s 30-day volatility dropped to 6.33, the lowest level since 1997. The Bloomberg Base Metals 3-Month Price Commodity Index declined 1.5 percent, the most since Dec. 20. China’s holiday retail sales rose at the slowest pace in four years.

“The economic recovery in China remains weak,” Jitra Amornthum, the head of research at Finansia Syrus Securities Pcl, said by phone in Bangkok. “The weaker Japanese yen will have an adverse impact on some exporters in the region, especially in South Korea.”

The South Korean won dropped for the first time in a week versus the dollar as the yen’s decline following the Group of 20 nations meeting sparked concern South Korea will step in to weaken its currency in support of exports.

Russia, Brazil

G-20 finance ministers and central bankers ended talks in Moscow on Feb. 16 pledging not to “target our exchange rates for competitive purposes,” without singling out Japan. The yen has tumbled almost 14 percent against the dollar in three months in response to stimulus policies from Prime Minister Shinzo Abe.

Russia’s Micex Index advanced 0.1 percent. Severstal, the steelmaker controlled by Alexey Mordashov, lost 1.2 percent. OAO Lukoil, Russia’s second-biggest oil producer, slid 0.4 percent in its third day of losses.

The Bovespa lost 0.5 percent in Sao Paulo to an 11-week low. B2W dropped 5.9 percent as a central bank weekly survey with about 100 economists showed Brazil’s gross domestic product will expand 3.65 percent next year, lower than the median forecast of 3.8 percent a week earlier.

Steelmaker Usinas Siderurgicas de Minas Gerais SA declined 3.4 percent before releasing its quarterly earnings today after the close of trading.

Earnings Reports

“Emerging markets are currently failing to track developed markets,” Martial Godet, head of strategy at BNP Paribas SA in London, said by e-mail. “Earnings downgrades are still strong for both 2012 and 2013. Energy and materials stocks are lagging.”

Sixty-two percent of companies in the emerging-markets gauge that have reported earnings have missed analysts’ estimates, according to data compiled by Bloomberg.

Turkey’s ISE National 100 gauge fell 0.2 percent. BIM Birlesik Magazalar AS, an operator of food and basic consumer-goods discount stores in Turkey, lost 2.1 percent. Aksigorta AS, the Turkish insurer co-owned by Belgium’s Ageas, rose 3.7 percent in Istanbul, after 2012 net income beat estimates.

Poland’s WIG 20 Index added 0.3 percent for the highest close in a week. Telekomunikacja Polska SA rallied 2.8 percent as ING Groep NV upgraded Poland’s largest phone company to hold from sell following the stock’s 39 percent slump last week after the company cut its dividend proposal for the second time in four months amid declining profit.

South Africa

The Czech Republic’s PX Index fell 0.3 percent. Komercni Banka AS, the Czech unit of Societe Generale SA, added 1.6 percent. CEZ AS fell for a fourth day after the Bulgarian government said it may revoke the Czech utility’s power-distribution license in the southeast European country.

South Africa’s FTSE/JSE Africa All Shares Index dropped 0.4 percent, declining for a third day. The rand fell to its weakest level in almost a week after clashes between rival labor unions at an Anglo American Platinum mine spurred concern of a repeat of violence that curbed production last year. The stock dropped 4.9 percent, the most in a month.

India’s benchmark stock index added 0.2 percent, the first gain in three days. Sri Lanka’s Colombo All-Share Index tumbled 1 percent, the most in almost three months.

Consumer Discretionary

A gauge of consumer-discretionary companies sank 0.9 percent, the most among the 10 industry groups in the MSCI Emerging Markets Index, followed by a 0.7 percent drop for raw-materials producers. The developing-nations broad measure has added 0.9 percent this year, trailing a 5.2 percent increase by the MSCI World Index.

The emerging-markets index trades at 10.4 times estimated profit, compared with the MSCI World’s 13.8 times, data compiled by Bloomberg show.

The Hang Seng China Enterprises Index declined 0.9 percent, its biggest drop since Feb. 7. The Shanghai Composite Index fell 0.5 percent in its first trading day after the weeklong break.

Daphne lost 3.8 percent. Intime Department Store Group Co. slid 3.7 percent in Hong Kong, the most since Jan. 25.

Hyundai Motor

Hyundai Motor Co. dropped 1.9 percent in Seoul, the most since Feb. 6. Kia Motors Corp. slipped 2.4 percent, the steepest loss since Feb. 4. A stronger won erodes the competitiveness of exporters. The won reached its highest level since October 2008 against Japan’s currency. The Group of 20 nations refrained from censuring Japan’s policies that have weakened the yen.

AU Optronics Corp. climbed 6.6 percent in Taipei, its steepest gain in two months, after settling an antitrust case and as January sales gained. Epistar Corp., a light-emitting diode maker, jumped 6.9 percent. Vincent Yu, an analyst at Jih Sun Securities Ltd., said Epistar will benefit as the peak season for the industry approaches.

Far EasTone Telecommunications Co., a mobile-phone operator, slumped 5.2 percent, the most since July 24. Barclays cut the stock to an equivalent of hold from an equivalent of buy, citing “disappointing prospects.”

Thailand’s SET Index climbed 0.1 percent, trading near the highest level since November 1994. Gross domestic product increased 18.9 percent in the three months through December from a year earlier, after expanding a revised 3.1 percent in the previous quarter, the government said today. The median of 14 estimates in a Bloomberg News survey was 15.3 percent growth.

The Philippine Stock Exchange Index added 0.7 percent to a record.

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