Emerging Stocks Drop to Seven-Month Low on Global Growth ConcernHarry Suhartono and Natasha Doff
Emerging-market stocks declined for a second day, pushing the benchmark index to the lowest since March, and currencies fell as concern deepened that global growth is slowing.
Hyundai Motor Co., which gets 46 percent of sales from North America and Europe, sank to a three-year low in Seoul. The Bloomberg GCC 200 Index of equities in the world’s biggest oil-exporting region retreated to the lowest level since July. Russia’s ruble lost 1 percent versus the dollar. The Ibovespa posted the biggest two-day loss in three years after Brazil’s growth slowed more than analysts forecast.
The MSCI Emerging Markets Index declined 1.2 percent to 970.74. Poland’s zloty fell 0.5 percent as most developing-nation currencies weakened amid concern that a financial crisis is returning to Europe’s so-called peripheral nations. While data today showed U.S. jobless claims unexpectedly dropped last week, reports yesterday showed a bigger-than-projected drop in retail sales.
“There are renewed fears about the global growth outlook,” Neil Shearing, an economist at Capital Economics Ltd. in London, said by phone. “The euro economy is clearly slowing and it looks to be heading for more problems.
All 10 industry groups in the MSCI Emerging Markets Index fell, led by energy companies. Hyundai Motor, South Korea’s largest automaker, dropped 4 percent. A Bloomberg gauge tracking 20 emerging-market currencies declined 0.2 percent.
The premium investors demand to own emerging-market debt over U.S. Treasuries narrowed four basis points to 326 basis points, JPMorgan Chase & Co. indexes show.
Cnooc Ltd. dropped 2.1 percent while China Petroleum & Chemical Corp. lost 1.8 percent. West Texas Intermediate crude rebounded to $82.70 a barrel in New York after falling below $80 for the first time since June 2012.
The ruble depreciated after posting its first gain in nine days yesterday as more than $9 billion in interventions and a central bank pledge to provide $50 billion of foreign currency through repurchase agreements failed to stem the rout. Russia gets about half of its budget revenue from oil and gas industries. The Micex Index decreased 1.2 percent.
‘‘We are back to tracking sliding oil prices,’’ Vladimir Osakovskiy, the chief economist for Russia at Bank of America Corp. in Moscow, said in e-mailed comments.
The Ibovespa fell 3.3 percent. Brazilian stocks sank after the central bank said the economy expanded 0.27 percent in August, missing the median estimate of 0.3 percent among economists surveyed by Bloomberg, after the prior 1.52 percent increase. State-run oil producer Petroleo Brasileiro SA led the decline, dropping 7.4 percent.
Dubai’s DFM General Index sank 5 percent to the lowest since July 1, taking its retreat this week to 14 percent. Equities in Saudi Arabia, the world’s largest oil exporter, slid 3.6 percent in their third day of declines. The BGCC 200 Index of Gulf Cooperation Council stocks lost 3 percent.
The Borsa Istanbul Index fell 0.4 percent. The PX Index retreated 2.4 percent in Prague after Czech industrial producer prices decreased more than estimated.
The MSCI emerging-markets gauge has declined 3.2 percent this year and trades at 10.5 times estimated earnings, data compiled by Bloomberg show. The MSCI World Index has fallen 4.1 percent in 2014 and is valued at a multiple of 13.9.
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong fell 1 percent to the lowest level since June 25, while the Shanghai Composite Index dropped 0.7 percent. Video footage showing police allegedly beating a protester in Hong Kong triggered an outcry from hundreds of people at pro-democracy demonstrations.