Jakarta - Emerging-market stocks slumped, paring the best quarter this year, before a potential US government shutdown. Turkey’s lira was set for the longest losing streak since 2002.
The MSCI Emerging Markets Index retreated 1 percent, the biggest drop since Aug. 28, to 989.53 at 1:41 p.m. in London.
Poland’s WIG 20 Index decreased 0.9 percent as Bank Pekao SA, the nation’s second-biggest lender, trimmed its strongest quarter in four years.
Turkish stocks fell 1.2 percent and the lira weakened for an eighth day, even as the nation’s current-account deficit narrowed more than expected.
Taiwan Semiconductor Manufacturing Co. led declines on the MSCI gauge.
The drops today pared the quarterly increase for the emerging-markets measure to 5.2 percent.
US Congress has until midnight tonight to end a budget stalemate that raises the risk of the first government shutdown in 17 years and threatens talks to increase the debt limit.
China’s Purchasing Managers’ Index rose less than economists estimated in September.
“What’s triggered today’s downwards move is a combination of the downwards revision of the Chinese PMI number, as well as the potential economic fallout of a US government shutdown,” Daniel Salter, head of equity strategy at Renaissance Capital in London, said by e-mail.
“Markets were ready for some short-term profit taking.”
The MSCI Emerging Markets Index rallied 6.5 percent this month, boosted by the US Federal Reserve’s decision to refrain from tapering monetary stimulus.
All 10 industry groups on the gauge declined today, led by financial and consumer- discretionary companies.
Benchmark indexes in the Philippines, Thailand and Serbia tumbled more than 2 percent, while the FTSE/JSE Africa All Shares Index declined 0.9 percent in Johannesburg.
Russia’s Micex Index decreased for a second day, losing 0.6 percent. Crude oil in New York dropped as much as 1.5 percent on concern any US government shutdown would curb demand in the world’s largest oil consumer.
Russia receives about half of its budget revenue from oil and natural-gas industries.
The House of Representatives voted 231-192 yesterday to stop many of the Affordable Care Act’s central provisions for one year, tying it to an extension of US government funding through December 15.
Should the Senate reject the bill today, the government could be shutdown from tomorrow.
The Borsa Istanbul National 100 Index lost 1.3 percent, taking its seven-day drop to 7.1 percent, as almost three stocks declined for every one that rose.
Turkey posted a current- account deficit of $7.02 billion, beating the $8.4 billion median estimate of 11 analysts surveyed by Bloomberg.
The lira weakened 0.2 percent against the dollar to 2.0338, after slumping as much as 0.7 percent. Malaysia’s ringgit lost 1 percent to 3.2595 a dollar, the biggest retreat among 24 developing-country currencies monitored by Bloomberg.
The Malaysian currency has depreciated 3.1 percent since June 30, while Indonesia’s rupiah headed for its worst three-month performance since 2008 due to a record current-account deficit.
The MSCI Emerging Markets Index has declined 6.2 percent in 2013, compared with a 16 percent gain in the MSCI World Index of developed-nation shares.
The developing-country index trades at 10.4 times projected 12-month earnings, lower than the MSCI World’s 13.9 times, data compiled by Bloomberg show.
The Hang Seng China Enterprises Index of mainland companies in Hong Kong lost 1.7 percent, paring the largest quarterly gain since the three months ended December 31.
China’s PMI from HSBC Holdings Plc and Markit Economics rose to 50.2 in September, less than the 51.2 median estimate in a Bloomberg News survey.
Taiwan Semiconductor, the world’s biggest contract maker of chips, dropped 2.4 percent, the most since July 29.
The company said Chiang Shang-yi, an executive vice president and one of three candidates shortlisted to succeed Chief Executive Officer Morris Chang, will retire on October 31.
India’s S&P BSE Sensex fell 1.8 percent, its second day of declines. India may have seen the worst of capital outflow as the rupee stabilizes and rising exports aid corporate earnings, Prashant Jain, chief investment officer at HDFC Asset Management Co., the nation’s biggest money manager, said in an interview with Bloomberg TV India.
Overseas funds have bought a net $2.1 billion of domestic shares this month, the first monthly net inflows since May. - Bloomberg News