Jakarta - Emerging-market stocks fell for the first time in five days, currencies weakened while borrowing costs rose as US lawmakers wrangled over the nation’s debt ceiling and government shutdown.
The MSCI Emerging Markets Index lost 0.5 percent to 1,002.70 at 4:24 p.m. in Hong Kong, led by telecommunications and energy shares.
The extra yield investors demand to own developing-nation debt over US Treasuries increased two basis points to 3.46 percentage points, according to JPMorgan Chase & Co. India’s rupee, Turkey’s lira and the South African rand weakened at least 0.6 percent against the dollar.
With the US set to exhaust measures to avoid breaching its debt ceiling on October 17, House of Representatives Speaker John Boehner said that lawmakers won’t raise the limit without packaging it with other provisions, a position opposed by President Barack Obama.
The 21 countries in the developing- nations gauge send about 17 percent of their exports to the US, data compiled by the World Trade Organization show.
“If the US fails to pay its debts, it would be very ridiculous,” Soni Wibowo, a director at Bahana TCW Asset Management, which manages $1.9 billion in assets, said by phone.
“This would cause problems in every country in the world.”
Treasury Secretary Jacob J. Lew said Congress needs to pass a debt-ceiling increase by October 17 or the US will be “dangerously low” on cash and risk defaulting on its payments.
The $12 trillion of outstanding government debt is 23 times the $517 billion Lehman Brothers Holdings Inc. owed when it filed for bankruptcy on September 15, 2008.
Executives from Berkshire Hathaway Inc.’s Warren Buffett to Goldman Sachs Group Inc.’s Lloyd C. Blankfein have warned that going over the edge would be catastrophic.
Vodacom Group Ltd. slumped 5.4 percent in Johannesburg and MTN Group Ltd. sank 2.5 percent after South Africa’s telecommunications regulator said call termination rates will be halved from March 2014.
OAO Gazprom, the supplier of a quarter of Europe’s natural gas, retreated 1.2 percent in Moscow after oil declined 0.7 percent.
Russia’s Micex Index slid 0.5 percent, while South Africa’s benchmark measure fell 0.7 percent to the lowest level since September 18.
All 10 industry groups in the MSCI Emerging Markets Index fell today.
The broad measure has lost 4.7 percent this year, compared with a 15 percent advance in the MSCI World Index of developed-nation shares.
The developing-country index trades at 10.5 times projected 12-month earnings, lower than the MSCI World’s 14 times, data compiled by Bloomberg show.
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong dropped 0.9 percent.
The World Bank cut its 2013 growth forecast for China’s economy to 7.5 percent, the Washington-based lender said in a report today, lower than an April forecast of 8.3 percent. Mainland Chinese markets, which have been closed since October 1 for the National Day holidays, resume trading tomorrow.
HTC Corp., the Taiwanese smartphone maker that posted its first-ever quarterly loss last week, tumbled 6.7 percent in Taipei, the biggest decline in the MSCI Emerging Markets Index.
HTC Chairwoman Cher Wang, in an October 5 interview with Bloomberg Television, acknowledged a “problem of communication” and said its biggest challenge is during this quarter.
“It’s a gap between our new products coming out and we are improving our innovation and our marketing,” she said.
Innolux Corp. slumped 6.5 percent in Taipei.
The decline in prices of television panels are expected to continue until the first quarter of 2014, according to Nomura Holdings Inc.
Taiwan’s Taiex Index retreated 0.4 percent.
The S&P BSE Sensex of Indian shares lost 0.6 percent.
The Philippine Stock Exchange Index advanced 0.8 percent, its fifth day of gains, capping the longest winning streak since May 15.
Trading volumes for the FTSE Bursa Malaysia KLCI Index were 52 percent below its 30-day average, while volumes for the Taiex Index were 42 percent higher, data compiled by Bloomberg show. - Bloomberg News