Emerging stocks set for biggest weekly loss since November
Emerging-market stocks headed for the biggest weekly loss since November as disappointing Chinese and Indian production data and a $2 billion trading loss at JPMorgan Chase & Co. spurred concern that global growth will falter.
The MSCI Emerging Markets Index lost 1 percent to 970.62 as of 12:38 p.m. in London. The gauge has dropped 4.2 percent in the past five days, an eighth straight decline and set for its longest weekly losing streak since 2008. The index has retreated more than 10 percent from this year’s March 2 high, exceeding the level that some investors consider a correction.
Cnooc Ltd., China’s biggest offshore energy explorer, dropped 2.1 percent in Hong Kong as oil prices slumped. Foxconn Technology Co. led losses among technology companies after sales fell. Maruti Suzuki India Ltd., India’s biggest carmaker, tumbled to a three-month low. Russia’s Micex Index sank 1.6 percent, erasing yesterday’s gains, while Poland’s WIG20 Index slipped 0.9 percent.
“Industrial production for emerging nations is declining faster than expected amid the slackening global demand environment,” said Aneesh Srivastava, who oversees about $470 million as chief investment officer at IDBI Federal Life Insurance Co. in Mumbai, said by phone today.
Chinese industrial output increased 9.3 percent in April from a year earlier, lower than all 32 estimates in a Bloomberg News survey and the biggest negative surprise in two years, data compiled by Bloomberg show. Consumer prices rose 3.4 percent from a year earlier, the National Bureau of Statistics said today, staying below the annual goal for the third month.
‘Grievous mistakes’
Stocks and commodities tumbled after JPMorgan said “grievous mistakes” and “sloppiness” caused the surprise loss on synthetic credit securities, underscoring risks to global financial markets.
Indian production declined 3.5 percent from a year earlier, less than the 1.7 percent gain projected by analysts in a Bloomberg survey.
Emerging-market equity funds posted outflows of $1.1 billion in the week ended May 9 on renewed concerns about Europe and Chinese growth, Citigroup Inc. analysts led by Markus Rosgen wrote in a report today, citing data compiled by EPFR Global. The “worst flows” were from the Central and Eastern Europe, Middle East and Africa region, while Asia ex-Japan had outflows of $81 million.
Hong Kong stocks
The Hang Seng China Enterprises Index slumped 1.4 percent. The gauge of Chinese companies traded in Hong Kong has plunged 6.8 percent this week, the biggest loss since September.
Foxconn Technology Co. lost 4.8 percent in Taipei after April sales fell 67 percent.
Agora SA, Poland’s largest publicly-traded publisher, lost 5.6 percent, retreating from the highest level in almost a month after reporting a net loss in the first quarter.
Anglo American Plc, the diversified miner that makes up about 8 percent of South Africa’s FTSE/JSE Africa All Share Index, dropped 1.3 percent after a commodities gauge fell for an eighth day, wiping out gains for the year. BHP Billiton Ltd., the world’s biggest resources company, dropped 1.5 percent.
South Africa’s rand retreated as much as 1.3 percent against the dollar, the weakest since Jan. 15.
The BSE India Sensitive Index, or Sensex, declined 0.7 percent, its lowest close in four months. Maruti tumbled 2.1 percent.
South Korea’s Kospi index and Taiwan’s Taiex Index both fell more than 1 percent.