Emerging Stocks Slip as Ukraine Fight Flares Amid Greek StandoffElena Popina and Natasha Doff
Emerging-market stocks retreated for a second day amid concern that a cease-fire in Ukraine is faltering and as investors weighed the potential impact of a Greek exit from the European currency union.
OAO GMK Norilsk Nickel fell 4.4 percent in Moscow, pacing declines among developing-nation commodity producers. Samsung Fire & Marine Insurance Co. tumbled 11 percent in Seoul after posting a monthly loss. Chinese equities posted their best seven-day advance before the Lunar New Year holiday since 2007. Brazilian markets were closed for a holiday.
Stocks in Moscow fell as pro-Russian rebels said they had taken control of a strategic crossroad town in eastern Ukraine, eroding a peace accord sealed last week. Greece may request an extension of its loan agreement for six months, according to a person familiar with the matter, a step that could ease a standoff with creditors over the country’s future financing. The stalemate has stoked concern that a potential withdrawal from the euro zone may destabilize the region’s financial markets.
“It’s a question of wait-and-see on what happens to Greece,” Simon Quijano-Evans, the head of emerging-market research at Commerzbank AG in London, said by phone. “The last thing we need is disruption in the euro zone. There is still a lot of uncertainty over Ukraine. The situation seemed to improve in the last day or so, but there is still a lot of concern.”
The MSCI Emerging Market Index slid 0.1 percent to 983.12. Nine out of 10 industry groups in the gauge declined, led by health care and raw-material companies.
The dollar-denominated RTS Index of Russian stocks declined 0.3 percent. The Micex slipped 0.4 percent in Moscow. The ruble advanced 1.1 percent against the dollar after reversing a decline of 0.3 percent. Oil, Russia’s top export, advanced to the highest level this year as chaos in Libya curbed output and an agreement between Iraq’s central government and the Kurdish region over crude exports was tested by falling prices.
In Ukraine, separatists said they took control of the strategic crossroad town of Debaltseve in eastern Ukraine. The separatists said 300 government troops had surrendered as they took control of four-fifths of the rail and highway junction. The fighting came amid a cease-fire that envisages a withdrawal of heavy weaponry starting Tuesday.
Emirates Integrated Telecommunications Co. led a 0.9 percent increase in Dubai’s DFM General Index. The phone company known as Du is set to announce quarterly results later this week, data compiled by Bloomberg show.
Nigeria’s All Share Index surged 2.6 percent, trimming it’s year-to-date drop to 18 percent. The equity index tumbled to the lowest level in more than two years last week as the naira’s retreat to a record prompted investors to sell assets in Africa’s biggest economy.
MSCI’s developing-nation gauge has risen 2.8 percent this year and trades at 11.7 times 12-month projected earnings, data compiled by Bloomberg show. The MSCI World Index has gained 2.6 percent in the period and is valued at a multiple of 16.6.
Samsung Fire & Marine Insurance Co. plunged the most since April 2002 after the company posted a monthly loss and its stock rating was cut to neutral at Credit Suisse Group AG.
The Hang Seng China Enterprises Index added 0.5 percent. The Shanghai Composite Index rose 0.8 percent, advancing for a seventh day in the longest streak of gains since Nov. 28. The gauge has rallied 52 percent during the past 12 months amid speculation that monetary stimulus will revive growth in the world’s second-largest economy.
Investors withdrew money from U.S. exchange-traded funds that invest in developing countries for a second straight week, bringing this year’s outflows to $1.81 billion.
The premium investors demand to hold emerging-market debt over U.S. Treasuries narrowed 11 basis points to 352 basis points, according to JPMorgan Chase & Co. indexes.
Markets in Taiwan, Vietnam and India were closed for holidays.