Emerging-Market Stocks Halt Four-Day Advance on U.S. GDP GrowthNatasha Doff and Zahra Hankir
Emerging-market stocks fell for the first time in five days and currencies slid as a report showed the U.S. economy grew more than predicted last quarter, cutting demand for riskier assets.
PetroChina Co. led a 3 percent drop in the Shanghai Composite Index as Chinese stocks fell from a four-year high amid concern a world-beating rally over the past month was excessive. Emaar Properties PJSC led Dubai stocks lower. The won fell against the dollar and the Polish zloty weakened versus the euro. The ruble climbed for a third day after Russia ordered companies to sell foreign-exchange revenue from exports.
The MSCI Emerging Markets Index slid 0.6 percent to 951.95. U.S. gross domestic product grew at a 5 percent annualized rate from July through September, the biggest advance since the third quarter of 2003, revised figures from the Commerce Department showed today. The Shanghai Composite’s 20 percent surge over the past month, fueled by speculation the central bank will loosen monetary policy, has driven valuations to three-year highs.
“Why should you invest in emerging markets when you get stable growth and even an appreciating dollar on the U.S. market?” Leopold Quell, a co-fund manager at Raiffeisen Capital Management in Vienna, said by e-mail. “That is what international investors are still thinking.”
All 10 industry groups in the emerging-markets index fell today, led by technology stocks. Hyundai Merchant Marine Co. sank the most since Nov. 3 after the company said it plans to sell 35 million new shares.
The Ibovespa gained 1.5 percent in Sao Paulo. Petroleo Brasileiro SA, the Brazilian state-run oil producer, rallied 6.3 percent as crude advanced.
Poland’s zloty and the Czech Koruna lost at least 0.4 percent versus the euro, while South Korea’s won retreated 0.6 percent against the dollar. The ringgit weakened for a third day, declining 0.2 percent after data showed Malaysia’s foreign reserves dropped to the lowest level since March 2011 as of Dec. 15.
The ruble strengthened 2.4 percent. The Micex Index slid 2.7 percent.
Russia’s government has instructed five state-controlled exporters, including OAO Gazprom and OAO Rosneft to reduce their foreign-exchange holdings by March 1 to levels that wouldn’t exceed those seen on Oct. 1, according to an official website posting.
MSCI’s developing-nation gauge has dropped 5.1 percent this year and trades at 11.1 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has advanced 3.8 percent and is valued at a multiple of 15.6.
Dubai’s DFMI General Index retreated 3.4 percent led by a 5.9 percent drop in Emaar Properties. The gauge entered a bull market this week after oil prices rebounded. Qatar’s QE Index dropped 1.8 percent today.
The Shanghai Composite Index ended a two-day increase as PetroChina slumped 5.6 percent and Industrial & Commercial Bank of China Ltd. declined 4.9 percent. Hong Kong’s Hang Seng China Enterprises Index retreated 0.6 percent, halting a four-day rally.
The premium investors demand to hold emerging-market debt over U.S. Treasuries narrowed eight basis points to 343 basis points, according to JPMorgan Chase & Co. indexes.