Emerging-market stocks dropped for a sixth day amid concern a worsening Europe debt crisis will dent exports and as oil traded near an eight-week low.
The MSCI Emerging Markets Index (MXEF) declined 0.3 percent to 1,013.09 as of 10:30 a.m. in London, the lowest since Jan. 31. Russian oil producer OAO Tatneft (TATN) fell 2.3 percent to its worst in more than a month. Komercni Banka AS (KOMB), the Czech unit of Societe Generale SA, and Austria’s Erste Group Bank AG (EBS) helped Czech’s PX Index rebound from the lowest in almost three months. Indexes in Turkey and South Africa declined. Russia’s Micex advanced.
Spanish Prime Minister Mariano Rajoy said yesterday the nation’s future is at stake in its battle to tame surging bond yields. Yields on 10-year Spanish bonds reached the highest this year and closer to levels that prompted Greece, Ireland and Portugal to seek bailouts. Oil hovered near its lows after an industry report showed stockpiles rose for a third week in the U.S., the world’s biggest consumer of crude.
“Equities are currently under intense pressure, as are emerging market currencies and peripheral bond markets in the Eurozone,” George Glynos, an economist at Johannesburg-based ETM Analytics, wrote in e-mailed comments today. “Anything with a risk profile of any sort is being shunned.”
The MSCI Emerging Markets Index has climbed 11 percent this year, beating a 6.5 percent advance in the MSCI World Index (MXWO) of developed nations. The gauge of developing-country shares is valued at 10.4 times estimated earnings, compared with the MSCI World’s multiple of 12.3.
South Africa, Poland, Turkey
Spain’s Economy Minister Luis de Guindos declined to rule out a rescue and Bank of Spain Governor Miguel Angel Fernandez Ordonez said the nation’s lenders may need more capital if the economy weakens more than expected. Europe is China’s biggest export market, making up about 18 percent of the nation’s overseas shipments, according to Shenyin & Wanguo Securities Co. The region is also the largest trading partner of countries including South Africa and India.
South Africa’s FTSE/JSE Africa All Share Index (JALSH) retreated 0.2 percent as Standard Bank Group Ltd. and Nedbank Group Ltd. (NED), the nation’s largest and fourth-largest lenders, declined 1.3 percent each.
Polish stocks advanced 0.5 percent as Bank Pekao SA (PEO), the country’s second-largest lender, gained 2.8 percent. The PX Index (PX) in the Czech Republic advanced 1.1 percent and Russia’s Micex Index added 0.6 percent.
Turkey’s National 100 (XU100) Index fell 0.6 percent as Turkcell Iletisim Hizmetleri AS (TCELL), the country’s largest mobile-phone company, dropped 1.4 percent to its lowest level since November.
Oil Producers Fall
Oil producers fell after crude futures declined 1.4 percent to an eight-week low in New York yesterday. Futures gained 0.6 percent in electronic trading today. Cnooc Ltd. slumped 2.1 percent in Hong Kong, while PetroChina Co. (857), China’s biggest oil producer, retreated 1.5 percent.
Kingfisher Airlines Ltd. (KAIR) led gains by Indian carriers, surging 6.7 percent after the Times of India said the government may decide tomorrow to end a ban on foreign carriers owning stakes in local operators.
The Markit iTraxx SovX CEEMEA Index of eastern European, Middle East and Africa credit-default swaps retreated one basis point to 290, according to data provider CMA.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries declined four basis points, or 0.04 percentage point, to 363, according to JPMorgan Chase & Co.’s EMBI Global Index.
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