Bangkok - Developing-nation stocks fell after a six-day rally sent the MSCI Emerging Markets Index to a three-month high.
India’s rupee snapped its longest winning streak in a year as currencies dropped from South Africa to Turkey.
The S&P BSE Sensex index slid 1.1 percent after valuations rose to the highest since July and Russia’s Micex Index ended an eight-day rally.
Hungarian oil company Mol Nyrt. fell the most in five weeks in Budapest after canceling a bond tender.
The rupee weakened 0.3 percent against the dollar on bets factory output contracted, while the rand lost 0.7 percent, the most among 24 emerging-market currencies monitored by Bloomberg.
The MSCI Emerging Markets Index lost less than 0.1 percent to 991.81 at 12:34 p.m. in London.
The gauge rose 6.2 percent in the six days through yesterday, the most for the period since September 2012, as prospects for an imminent US strike on Syria eased and Chinese economic data improved.
The measure’s relative strength index reached 69.8, approaching the 70 threshold that signals a security is poised to fall, for the first time since January 14.
“With a diplomatic solution in the Syria conflict possible and a military strike postponed, focus is shifting back to Fed tapering,” Michael Ganske, the head of emerging markets at Rogge Global Partners Plc in London, said by e-mail.
“We should expect higher volatility in the coming days. Today’s correction is natural.”
Gauges of energy and health-care stocks in the MSCI Emerging Markets Index fell, the steepest drops among 10 industry groups. Ten-day price swings on the index rose to 13 today, the highest in almost a week.
Federal Reserve policy makers will resume a debate on when to pare $85 billion in monthly bond purchases at their September 17-18 meeting.
The US central bank is likely to reduce asset purchases to $75 billion this month, according to a Bloomberg survey of 34 economists.
The Sensex slid the most since September 3, the fourth-steepest decline among 94 benchmark stock indexes tracked by Bloomberg. The measure closed unchanged yesterday after rising 3.8 percent on September 10.
The rally, driven by a rebound in the rupee and inflows from overseas funds, pushed up the stock index’s valuation to 14.2 times estimated 12-month profits.
The MSCI Emerging Markets Index has lost 6 percent this year, headed to its biggest annual underperformance since 1998 versus the developed-nation index, which is up 15 percent.
The emerging-market gauge trades at 10.5 times projected 12-month earnings, compared with the MSCI World’s 13.8 times, according to data compiled by Bloomberg.
Russia’s Micex Index headed for the biggest decrease in two weeks, snapping the longest streak of gains since 2010, as power companies sank. OAO Russian Grids tumbled 2.5 percent, the most in a week.
Hungary’s benchmark BUX Index slumped 1.1 percent led by Mol, which has the largest weighting on the gauge.
Unit Emona Investment Kft canceled a bond tender for Magnolia Securities after the offer announcement drove shares up the most in two months yesterday.
The Prague Stock Exchange index lost 0.7 percent.
AngloGold Ashanti Ltd. was the second-biggest decliner on the benchmark FTSE/JSE Africa All Shares Index in Johannesburg, losing 2.9 percent.
The local labor climate remains troubled, with mines suffering strikes and circumstances difficult given bitter union rivalry, JPMorgan Chase & Co. said in a note.
The rand depreciated to 9.9395 a dollar and India’s rupee snapped a five-day gain before a report that will probably show industrial production fell 0.9 percent in July, according to the median of 28 estimates in a Bloomberg survey.
The Turkish lira weakened for the first time in five days, dropping 0.5 percent, after data showed Turkey’s current-account deficit exceeded estimates.
One-month non-deliverable forward contracts on the rupiah jumped 1.3 percent after Indonesia unexpectedly raised its key interest rate for the fourth time since early June to support a weakening currency and cool inflation expectations.
The currency has slumped the most this year among major Asian currencies tracked by Bloomberg.
The Bank of China Ltd. gained 1.4 percent, the biggest advancer by index points on the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong, after China’s Premier Li Keqiang pledged policy changes that will ripple throughout the financial system. - Bloomberg News