The iShares MSCI Emerging Markets exchange-traded fund fell as the recession in the euro area and Hungary deepened. Chinese developers advanced in Hong Kong as trading resumed after the New Year holiday.
OTP Bank Nyrt. helped pace declines in Hungary’s BUX stock index, slumping 2.2 percent. Telekomunikacja Polska SA retreated 9.4 percent, extending this week’s plunge to 40 percent, as Poland’s biggest phone company cut its dividend proposal. Brazil’s Bovespa index retreated to a two-month low. China Resources Land Ltd. and China State Construction International Holdings Ltd. rose more than 3.2 percent.
The iShares emerging-markets ETF dropped 0.1 percent to $44.15 at the close in New York. The MSCI Emerging Markets Index added 0.1 percent to 1,065.84 as 333 stocks rose while 333 fell. The euro-area gross domestic product had the worst performance since 2009 as the region’s three biggest economies suffered slumping output. Hungary’s GDP tumbled the most in three years. Stocks in Poland and the Czech Republic also slid.
“A lot of eastern European countries happen to have their markets very closely tied to western Europe and that is not a very good situation to be in,” Jan Dehn, co-head of research at Ashmore Investment Management Ltd., said in an interview in London yesterday. “If you are looking at the year as a whole, the two regions I like the most are Asia and Latin America.”
The MSCI Emerging Europe, Middle East and Africa Index lost 0.7 percent. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index (VXEEM:US), a gauge of options prices on the fund and expectations of price swings, was unchanged at 15.84.
Utility and energy companies lost at least 0.2 percent, leading declines among the 10 industry groups in the MSCI Emerging Markets Index. A gauge of industrial stocks gained the most, rising 0.3 percent.
OTP, Hungary’s largest lender, sank 2.2 percent in Budapest. Telekomunikacja Polska, controlled by France Telecom SA, dropped 9.4 percent to a record low in Warsaw. The company cut its dividend proposal for the second time in four months on Feb. 12.
Russia’s Micex Index retreated 1.2 percent, the most since November. OAO Gazprom, Russia’s biggest energy producer, fell 2.2 percent.
Brazil’s Bovespa slipped 0.6 percent to the lowest close since Dec. 6. Vale SA dropped 1.4 percent. Lender Banco do Estado do Rio Grande do Sul SA helped pace declines on the MSCI EM Latin America Index, with preferred shares falling 2.8 percent as profit missed estimates.
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong gained the most since Jan. 18 as trading resumed. China and Taiwan are shut for the week. The Jakarta Composite Index rose 0.4 percent to a record with trading volume 117 percent above the 30-day average. The BSE India Sensitive Index, or Sensex, fell 0.6 percent.
China Resources Land, a state-owned developer, advanced 3.3 percent, after last week slumping 7.6 percent on concern more property curbs will be introduced. China State Construction rose 6.7 percent. Wynn Macau Ltd. gained 2.2 percent, pacing gains in Macau casino operators, on increased tourist arrivals during a three-day holiday.
MSCI Inc.’s decision to add People’s Insurance Co. and New China Life Insurance Co. to its China index sent the shares up more than 2.1 percent. Maruti Suzuki India Ltd. slumped 3.1 percent after it was cut from the India Index. The changes take effect after Feb. 28, according to MSCI, whose indexes are tracked by investors with about $7 billion in assets.
U.S. shares of Tata Motors Ltd. (TTM:US) tumbled 4.9 percent in New York, the most since Jan. 23, to $27.25. India’s biggest automaker posted profit that missed analyst estimates as costs climbed and increased demand for its lower-priced Evoque model cut earnings at the Jaguar Land Rover Ltd. unit.
PT Bumi Resources rose 26 percent, the most in more than nine years in Jakarta trading, on optimism next week’s shareholder meeting of Bumi Plc, its largest shareholder, will resolve an ownership dispute.
The MSCI Emerging Markets Index has risen 1 percent this year, trailing a 5.5 percent gain in the MSCI World Index of developed nations. The gauge of developing nations trades for 10.4 times estimated profit, compared with the MSCI World’s multiple of 13.8, according to data compiled by Bloomberg.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose 3 basis points, or 0.03 percentage point, to 275, according to JPMorgan Chase & Co.’s EMBI Global Index.
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