London - Emerging-market stocks declined from a three-month high before the Federal Reserve announces whether it will trim its $85 billion in monthly bond buying.
Russia’s ruble retreated for the first time in 11 days.
The MSCI Emerging Markets Index dropped 0.4 percent to 998.63 at 10:03 a.m. in New York, after rising to the highest since June 4 yesterday.
The Jakarta Composite index slid 1.2 percent, the most among 94 world gauges tracked by Bloomberg, as banks fell.
Tencent Holdings Ltd., China’s No. 1 Internet company, sank 3.9 percent, while shareholder Naspers Ltd. led losses in Johannesburg. Stock indexes in India, China and Brazil gained.
Russia’s ruble declined after a 3.3 percent rally.
The Federal Open Market Committee today will probably conclude a two-day meeting by dialling down monthly Treasury purchases by $5 billion to $40 billion, while maintaining its buying of mortgage-backed securities at $40 billion, according to a Bloomberg News survey of economists.
The benchmark measure for developing nations has slumped 4.7 percent since May 22, when the Fed signaled its asset-buying program could be trimmed if the economy showed sustained improvement.
“Most investors are waiting for a clearer policy from the Fed today,” Budsares Yunniyom, a fund manager at Asset Plus Fund Management Co., which oversees about $884 million of assets, said in Bangkok.
“A larger-than-expected tapering will hurt emerging markets and lead to an outflow of funds. If the tapering is smaller, we expect a rally in stocks.”
All 10 groups in the MSCI Emerging Markets Index declined today as consumer discretionary and technology shares had the biggest losses.
The measure for developing markets trimmed this year’s slump to 5.4 percent, trading at 10.6 times projected earnings, according to data compiled by Bloomberg.
That trails the 14 valuation of the MSCI World Index.
The iShares MSCI Emerging Markets Index exchange-traded fund, the developing-nation ETF, fell 0.4 percent to $41.35.
The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, rose 3.6 percent to 25.13.
The premium investors demand to own emerging-market debt over US Treasuries slid three basis points, or 0.03 percentage point, to 327 basis points, according to JPMorgan Chase & Co. - Bloomberg News