Emerging-market stocks fell for a fifth day, dragging the benchmark index to its lowest level in more than two months, after less-than-forecast Chinese import growth boosted concern the world’s second-largest economy is slowing.
The MSCI Emerging Markets Index (MXEF) retreated 1 percent to 1,016.17 at the close in New York, the weakest since Jan. 30, led by energy and consumer discretionary companies. Kiler Alisveris Hizmetleri Gida Sanayi & Ticaret AS, a Turkish chain of discount food stores, plunged the most in eight months after its parent denied a report it may offer a stake in the unit. Brazilian apparel retailer Cia. Hering (HGTX3) lost the most since Sept. 22 as the Bovespa touched a 12-week low.
China reported an unexpected trade surplus last month as import growth trailed forecasts. March exports rose 8.9 percent from a year earlier, after an 18.4 percent increase in February, the customs bureau said in a statement on its website today. U.S. employers added 85,000 fewer jobs in March than economists projected, the Labor Department said April 6, when most European markets were closed.
“The Chinese economy is weakening, since domestic demand is heading to the downside,” Daniel Lenz, chief emerging-market strategist at DZ Bank AG in Frankfurt, said by phone. “It’s the combination of a lot of negative things, first there is China, secondly there is the U.S. after last week’s worse-than-expected job data. Since markets were closed for a couple of days they are now pricing this negative news in.”
Emerging-market stocks have advanced 11 percent this year, outperforming developed-country shares on the MSCI World Index, which has gained 6.5 percent. Developing-nation equities trade for 10.4 times estimated earnings, compared with a 12.3 times ratio for developed-market stocks.
The IShares MSCI Emerging Markets Index exchange-traded fund (EEM:US), the most-traded ETF to track developing-nation shares, fell 1.9 percent to $41.30 in New York. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index (VXEEM), a gauge of options prices on the fund and expectations of price swings, rose 8.4 percent to 30.31.
Brazil’s Bovespa stock index fell 1.9 percent to the lowest since Jan. 18. Hering retreated 5.6 percent, the biggest one-day drop since Sept. 22.
BR Malls Participacoes SA (BRML3), Brazil’s biggest owner of shopping malls, gained 1.2 percent, after signing an agreement with Indianapolis-based Simon Property Group Inc. to develop shopping outlets in Brazil.
The ISE National 100 Index (XU100) declined 1.4 percent in Istanbul. Kiler Alisveris fell 7 percent after parent Kiler Holding AS denied a report it may offer a stake in the unit.
Mexico’s IPC (MEXBOL) index slid 1 percent. The WIG20 Index (WIG20) tumbled 1.6 percent in Warsaw and Hungary’s BUX Index (BUX) retreated 0.9 percent.
Speculation the government will take measures to boost the Chinese economy helped the Shanghai Composite Index (SHCOMP) reverse early losses of as much as 1.2 percent to gain 0.9 percent. Poly Real Estate Group Co. (600048) climbed 3.3 percent, leading gains for property developers. The Hang Seng China Enterprises Index (HSCEI) of mainland companies traded in Hong Kong slid 1.4 percent in its first day of trading since April 5.
“There’s speculation that the central government will have a meeting to review the economy in the first quarter and may fine-tune policies to spur growth,” said Wang Zheng, Shanghai- based chief investment officer at Jingxi Investment Management Co., which manages about $120 million.
Taiwan’s Taiex Index (TWSE) increased 0.5 percent, cutting a 1.4 percent slump yesterday, after a government panel outlined two options for investors to assess their taxable income under a possible capital gains tax on stock trades, easing concerns over how the levy would be calculated.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose five basis points to 366 basis points, or 3.66 percentage points, according to JPMorgan Chase & Co.’s EMBI Global Index.
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