Bloomberg News

Most Emerging Stocks Decline After U.S. Growth Misses Forecast

November 23, 2011

Nov. 22 (Bloomberg) -- Most emerging-market stocks declined as slower-than-estimated U.S. economic growth overshadowed signs the Federal Reserve may provide more stimulus and news that the International Monetary Fund revamped a credit line program to tame Europe’s debt crisis.

The MSCI Emerging Markets Index fell 0.1 percent to 909.34 at 5:07 p.m. New York time, with 404 stocks dropping while 371 gained. The Bovespa stock index slid 0.7 percent in Sao Paulo. Turkey’s benchmark lost 1.5 percent and the Czech Republic’s PX equity index fell 1.1 percent after a spokesman for German Chancellor Angela Merkel’s party said the European Central Bank doesn’t have a “bazooka” to solve the European debt crisis.

U.S. gross domestic product climbed at a 2 percent annual rate from July through September, less than projected and down from a 2.5 percent prior estimate, revised Commerce Department figures showed today in Washington. Some U.S. Federal Reserve policy makers said the central bank should consider easing policy further, according to minutes of their Nov. 1-2 meeting. The IMF announced changes to the credit program, enabling countries that pre-qualify to request IMF funds without having to make as many policy changes.

“Emerging markets have been quite volatile, the concerns about what’s going on in Europe seem to be continuing to dominate most of the market activity,” Gregory Lesko, managing director of Deltec Asset Management Corp. in New York, said in a phone interview. “You get a little bit of positive news like the IMF and the market turns around pretty quickly.”

Santander, PDG

Banco Santander Brasil SA tumbled in Sao Paulo, spurred by plans by its controlling shareholder to sell a stake. PDG Realty SA Empreendimentos & Participacoes, Brazil’s biggest homebuilder by revenue, sank 4.4 percent to the lowest level in a month.

Tata Motors Ltd., India’s biggest truckmaker and owner of Jaguar Land Rover, surged 6.8 percent, helping the Sensitive Index climb 0.8 percent in Mumbai.

The Hang Seng China Enterprises Index gained 0.2 percent in Hong Kong after Standard & Poor’s said it wouldn’t further cut the U.S. credit rating.

Egypt’s stock exchange suspended trading for one hour after the benchmark EGX 30 Index declined for the 10th day, losing 4.8 percent to the lowest level since March 2009. The government offered to quit after fighting between protesters and security forces continued.

In rallies that started Nov. 19, protesters pressed the ruling military council to set a time-line for presidential elections. The government put its resignation “at the disposal” of the council, Cabinet spokesman Mohamed Hegazy said yesterday.

Rand, Real Decline

The South African rand and the real depreciated 0.6 percent against the dollar. South Korea’s won declined 0.4 percent. The Czech koruna rose 0.6 percent and the Mexican peso increased 0.3 percent.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose 1 basis point, or 0.01 percentage point, to 428, according to JPMorgan Chase & Co.’s EMBI Global Index.

The Markit iTraxx SovX CEEMEA Index of eastern European, Middle East and Africa credit-default swaps rose 4 basis points to 364, according to data provider CMA.

--Editors: Brendan Walsh, Glenn J. Kalinoski

To contact the reporters on this story: Weiyi Lim in Singapore at wlim26@bloomberg.net; Jason Webb in London at jwebb25@bloomberg.net.

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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