Jakarta - Emerging-market stocks declined for a ninth day after foreign direct investment into China sank to a four-year low and investors weighed the timing of Federal Reserve interest-rate increases.
The ruble weakened to a record.
China Petroleum & Chemical Corporation, known as Sinopec, lost 2.7 percent while the Shanghai Composite Index slid 1.8 percent and shares in India decreased 1.2 percent.
Russia’s currency led regional peers lower as a new round of sanctions triggered the demand for dollars and oil fell.
The PX Index retreated 1 percent in Prague, while South Africa’s FTSE/JSE Africa All Share Index headed for the lowest close in five weeks.
The MSCI Emerging Markets Index slipped 0.4 percent to 1,051.21 at 12:58 pm in London.
Data today showed inbound investment into China declined 14 percent from a year earlier in August, fuelling concern that the world’s second-largest economy is weakening.
US 10-year yields touched the highest level since July yesterday on speculation the Fed will indicate it’s moving closer to raising interest rates.
Lower crude prices and higher US yields “combined with the geopolitical noise is going to present emerging markets with a rough ride ahead,” Simon Quijano-Evans, the London-based head of emerging-market research at Commerzbank, said by e-mail.
Policy makers, who start a two-day meeting today, are considering how much progress toward their goals of full employment and stable inflation would be needed to prompt the first rate increase since 2006.
Fed Chair Janet Yellen is likely to raise interest rates gradually between 2015 and 2017 as inflation remains muted, according to a Bloomberg survey of economists conducted September 11 to 15.
Stock Valuations
The developing-nation stock measure is set for its longest rout since November.
The gauge has gained 4.8 percent this year and is valued at 11.1 times estimated 12-month earnings, according to data compiled by Bloomberg.
The MSCI World Index has risen 3.8 percent and trades at a multiple of 14.9.
The ruble weakened 0.6 percent versus the dollar as oil slipped 0.4 percent in New York.
Russian companies are facing a shortage of foreign currency exacerbated by the latest round of sanctions imposed by the European Union and US.
“The threat of sanctions and closed access to foreign- exchange liquidity from the West feed demand,” Dmitry Polevoy, chief economist for Russia and the Commonwealth of Independent States at ING Groep NV in Moscow, said in an e-mailed note.
Sinopec Tumbles
The Micex Index added 1.2 percent after a 0.3 percent drop yesterday.
Equity gauges in Prague and Johannesburg fell 0.9 percent.
Eight of 10 industries in the MSCI emerging-markets index retreated, led by phone companies.
The premium investors demand to own developing-country debt over US Treasuries increased two basis points to 281 basis points, according to JPMorgan Chase & Co. indexes.
Sinopec declined the most since July 1.
SAIC Motor and Hisense Electric slid more than 3 percent to lead a decrease for consumer companies reliant on economic growth.
Taiwanese electronics makers slumped amid concern China may raise tariffs on liquid-crystal display panels.
Acer, AU Optronics and Innolux dropped at least 4.6 percent.
The benchmark Taiex Index decreased 0.9 percent to its lowest close since August 8. - Bloomberg News