Emerging ETF Falls as Gazprom Leads Commodity Shares DownJulia Leite, Lyubov Pronina and Anuchit Nguyen
The iShares MSCI Emerging Markets Index declined for a third day as a slump in commodities spurred a selloff in producers from Vale SA to OAO Gazprom. Russian bond yields surged to the highest level in 21 months.
The exchange-traded fund dropped 1.1 percent to $38.81 at 4 p.m. in New York. The MSCI Emerging Markets Index advanced 0.1 percent to 955.89. Russia’s Micex Index tumbled 2.3 percent, led by Gazprom, while bonds declined as the government canceled its fifth local-currency debt auction this year amid escalating tension in Crimea. Vale, the world’s largest iron-ore producer, decreased to an eight-month low in Sao Paulo.
Commodity companies led declines among the 10 industries in the measure for emerging-market stocks. Copper futures slumped to the lowest level since July 2010 amid concern Chinese demand will slow down, while West Texas Intermediate crude tumbled to a one-month low. Russia showed no signs of yielding in the Crimea standoff as Ukraine bolstered its defenses before its prime minister meets U.S. President Barack Obama tomorrow.
“More people are worried about growth in the emerging markets, given the weaker data we’ve seen from China and how that impacts commodity demand,” Jeff Papp, a senior analyst at Oberweis Asset Management Inc., which manages $1.1 billion in assets, said by phone from Lisle, Illinois. “And there’s probably some continued worries about everything that’s going on in Russia and how that doesn’t seem to be getting resolved.”
The premium investors demand to own emerging-market debt over U.S. Treasuries rose 0.01 percentage point to 313 basis points, according to JPMorgan Chase & Co.
Brazil’s Ibovespa climbed from an eight-month low as a bigger-than-forecast increase in industrial production boosted the outlook for the economy. Vale slid for a third day.
The Micex Index dropped to the lowest in a week as Gazprom sank 2.4 percent. Ruble government bonds due February 2027 fell for a third day, lifting the yield 10 basis points to 8.96 percent, the highest since June 2012.
China’s CSI 300 Index rose as the yuan halted a two-day slide. China Vanke Co. paced gains for developers after the China Securities Journal reported its president bought one million shares in the secondary market. The benchmark money-market rate slid on speculation the central bank’s yuan sales aimed at curbing exchange-rate gains have increased the amount of cash in the financial system.
Egypt’s benchmark EGX 30 Index rallied 1.7 percent after Morgan Stanley raised the nation’s shares to the equivalent of neutral because of improvement in earnings revisions.