Jakarta - Emerging market stocks declined yesterday as Tencent Holdings led a slide in internet companies while tensions in Ukraine escalated. Russia’s rouble and Hungary’s forint weakened.
Tencent sank 4.5 percent in Hong Kong and a gauge of Asian internet companies erased its gain for the year amid concern that valuations overshot earnings prospects.
Moscow’s Micex index slid the most in three weeks and the rouble lost 0.5 percent versus the dollar. The forint retreated 0.2 percent against the euro after Prime Minister Viktor Orban won Sunday’s parliamentary election. The Jakarta composite index rose to a 10-month high before legislative polls this week.
Hundreds of pro-Kremlin demonstrators seized official buildings in Ukraine’s eastern regions urging referendums on joining Russia.
Indonesia holds legislative elections tomorrow while India kicked off the biggest election yesterday.
“Tech stocks are dragging the market down,” Priyo Santoso at PT Mandiri Manajemen Investasi said yesterday. “The elections in Indonesia and India, if all goes well, could further unlock the growth potential for these two economies.”
The MSCI emerging markets index has fallen 0.2 percent this year and trades at 10.4 times projected 12-month earnings, according to data. The MSCI world index has gained 0.8 percent this year and is valued at 14.8 times.
Six of 10 industry groups in the developing nation gauge rose, led by utility stocks. Energy and technology shares dropped the most.
The Asia Pacific internet index slid 3.8 percent, extending its decline from a March 6 high to 15 percent and heading for its lowest close since December 25. The losses follow declines in its US peers as investors pare holdings in internet companies that have led gains in global equities during the past 12 months.
Tencent slid 4.6 percent, while Naver tumbled 6.5 percent in Seoul. – Bloomberg