Emerging Stocks Fall to 15-Week Low on China as Ibovespa DropsLyubov Pronina and Ian Sayson
Emerging-market stocks fell to the lowest in 15 weeks after China’s finance minister damped speculation that the government will boost stimulus in the world’s second-largest economy.
The MSCI Emerging Markets Index dropped 1.3 percent to 1,040.29. PetroChina Co. led a gauge of Hong Kong-traded Chinese shares to a two-month low. OAO Alrosa, Russia’s largest diamond producer, decreased 3 percent after its chief executive officer stepped down. Iron-ore producer Vale SA, whose top export market is China, fell to the lowest since December 2008 as Brazil’s Ibovespa declined for a fourth straight day.
China’s Finance Minister Lou Jiwei said growth faces downward pressure and there won’t be major policy changes in response to economic indicators. Russian stocks have slid since billionaire Vladimir Evtushenkov’s arrest last week soured sentiment already hurt by sanctions from the U.S. and European Union over the country’s role in the Ukraine conflict.
“We have had increasing uncertainty among clients about the effectiveness of policies that have been pursued by the Chinese authorities to stimulate growth,” Koon Chow, an emerging-markets strategist at Barclays Plc in London, said by phone from London. “Investors at the same time are feeling the global growth outlook is difficult.”
The developing-nation stock measure has risen 3.7 percent this year and trades at 11 times 12-month estimated earnings, data compiled by Bloomberg show. The MSCI World Index has gained 4 percent and is valued at a multiple of 15.
The ruble weakened for the third time in four days, falling 0.7 percent versus the dollar. The Micex Index dropped 1.3 percent in its fourth day of declines, the longest slump since the six days ended July 21. Alrosa dropped the most since Sept. 12 after CEO Fyodor Andreev resigned for health reasons.
Saudi Arabia’s benchmark stock index decreased 1.2 percent, the most since June 16. Stocks in the Czech Republic retreated for the first time in four days. Turkey’s lira fell to a six-month low.
Anglo American Platinum Ltd. dropped to an eight-month low in Johannesburg as the FTSE/JSE Africa All Share Index retreated 1.9 percent. Commodities extended declines to a five-year low on speculation the strengthening dollar and signs of a slowdown in China will curb demand for raw materials.
PetroChina retreated 2.5 percent and the Hang Seng China Enterprises Index fell 1.7 percent. The Shanghai Composite Index also slid 1.7 percent, its first loss in four days.
China data last week showed foreign direct investment dropped to a four-year low and home prices decreased in all but two cities tracked by authorities. A private gauge of Chinese manufacturing due to tomorrow may decline for a second month, a survey showed.
The Ibovespa declined 1.7 percent. Vale sank 4.1 percent.
All 10 industry groups in the developing-nation stock gauge fell, led by raw-material producers. Agile Property Holdings Ltd. tumbled 7.2 percent in Hong Kong after saying it plans to raise HK$2.75 billion ($355 million) in a rights offer.
Taiwan’s Taiex Index lost 1.1 percent. India’s S&P BSE Sensex Index added 0.4 percent. South Korea’s won rose the most since Aug. 22 after Standard & Poor’s raised the country’s outlook to positive from stable. The nation’s benchmark Kospi Index retreated 0.7 percent.
The premium investors demand to own developing-country debt over U.S. Treasuries increased two basis points to 282 basis points, according to JPMorgan Chase & Co. indexes.
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