Manila - Emerging-market stocks fell to a six-month low as investors weighed prospects that the Federal Reserve will reduced monetary stimulus.
Turkish shares tumbled and yields surged after Prime Minister Recep Tayyip Erdogan signalled he won’t tolerate protests.
Turkey’s benchmark equity gauge extended declines from this year’s peak to 20 percent.
Shares in Brazil declined for a second day, while yields in Poland and Hungary climbed to two-month highs.
OAO TNK-BP Holding, the traded unit of the Russian oil venture that OAO Rosneft bought for $55 billion, fell the most in two weeks as the board recommended waiving dividends for last year.
MTN Group Ltd. extended declines, heading for the lowest since April 30 in Johannesburg.
The MSCI Emerging Markets Index lost 0.8 percent to 983.36 at 2:40 p.m. in London, heading for the lowest close since November 21.
US jobless claims dropped last week, the Labor Department said today after data yesterday showed employers hired fewer workers than projected in May and factory orders in April fell short of estimates.
China’s government is scheduled to release reports on trade, inflation and industrial output this weekend.
“Some investors aren’t convinced that the US economy’s recovery has gained traction,” Jonathan Ravelas, chief market strategist at BDO Unibank Inc., said in Manila.
“The market is looking for more proof the US recovery is making progress.”
The MSCI gauge has fallen 2.6 percent this week as investors mulled whether the Fed will reduce bond purchases if the economy improves.
The 21 countries in the developing-nations gauge send about 17 percent of their exports to the US, data compiled by the World Trade Organization show.
The European Central Bank kept interest rates on hold today.
Turkey Protests
The iShares MSCI Emerging Markets Index exchange-traded fund slid 0.1 percent to $40.50.
Turkey’s Borsa Istanbul Stock Exchange National 100 Index fell 7.1 percent, extending declines from the peak on May 22 to 20 percent, a threshold for a so-called bear market.
The yield on two-year lira notes jumped 46 basis points to 6.78 percent and the lira weakened 0.3 percent against the dollar, reversing earlier gains.
Illegal protests will not be allowed and tear gas is used everywhere in the world against protestors, Erdogan said at a news conference today in Tunisia.
Protests continued for a seventh day in Turkey today.
Brazil’s Ibovespa dropped 0.6 percent.
The yield on Hungary’s 10-year forint bond rose 13 basis points to a two-month high of 5.86 percent as traders pared bets the central bank will keep lowering borrowing costs after 10 consecutive months of easing.
The rate on similar-maturity Polish zloty debt climbed nine basis points to 3.69 percent.
Russia Stocks
TNK-BP Holding fell as much as 8.2 percent and traded 2.8 percent lower in Moscow.
Minorities in TNK-BP have sought to retain high payouts after state-run Rosneft took over the company.
Russia’s Micex Index dropped 0.3 percent to the lowest in a year, leaving the gauge down 10 percent in 2013.
The dollar-denominated RTS Index slid 0.8 percent after the gauge entered a bear market yesterday, falling 20 percent from this year’s peak in January.
South Africa’s FTSE/JSE Africa All-Share Index retreated 0.9 percent, heading for the lowest since May 13.
Naspers, Africa’s largest media group, lost 2.1 percent, extending yesterday’s 2.4 percent drop.
MTN, South Africa’s largest mobile-phone operator, fell 1.6 percent, declining for a fourth day, its longest losing streak since January 15.
Fitch downgraded the company’s long-term rating to AA- from AA to reflect MTN’s “growing reliance on cash generated from weak non-investment grade countries,” it wrote in a statement on June 4.
Bonds Fall
India’s S&P BSE Sensex declined 0.3 percent to a five-week low as Infosys, the country’s second-largest software exporter, fell 1.3 percent in Mumbai.
The MSCI developing-nations gauge has lost 6.9 percent this year, compared with an 8.2 percent increase in the MSCI World Index of developed-country stocks.
The emerging-markets measure trades at 10 times 12-month projected profit, a seven-week low, compared with the MSCI World’s 13 times, according to data compiled by Bloomberg.
The extra yield investors demand to own emerging-market debt over US Treasuries rose one basis point, or 0.01 percentage point, to 311 basis points, according to JPMorgan Chase & Co.’s EMBI Global Diversified Index.
China Drops
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong fell 1.1 percent, its seventh day of declines and the longest losing streak in a year.
The Shanghai Composite Index lost 1.3 percent, the most since April 23.
China’s overnight money-market rate climbed before a three-day holiday next week on speculation cash supply will tighten as banks hoard funds.
Taiwan’s Taiex Index slid 1.1 percent to the lowest level since April 30.
Stock markets in South Korea and Indonesia are closed for holidays.
Gauges of health-care and consumer-discretionary shares in MSCI’s developing-nation index retreated at least 1 percent, the most among 10 industry groups.
Taiwan Semiconductor Manufacturing Co., the world’s largest contract maker of chips, dropped 1.8 percent in Taipei.
Radiant Opto-Electronics sank the most since December 2011 after sales tumbled in May.
Thailand’s SET Index sank 2.1 percent, repeating yesterday’s 2.1 percent loss.
Thai stocks have fallen in line with other Southeast Asian markets on concern about fund outflows from the region, Charamporn Jotikasthira, president of the Stock Exchange of Thailand, said today.
The exchange doesn’t plan any support measures for the market, he said.
The Philippine Stock Exchange Index rose 0.8 percent, after a three-day, 6.6 percent slump.
Jollibee Foods and Alliance Global led gains.
The selloff was an “extreme overreaction,” Philippine Stock Exchange President Hans Sicat said in an interview with ABS-CBN News today.
Vietnam’s VN Index gained 1.2 percent, the most among benchmark gauges in Asia.
Vietnamese regulators will submit a proposal next month to ease restrictions on foreign ownership in companies, Vu Bang, chairman of the State Securities Commission, said in an interview yesterday. - Bloomberg