Manila - Emerging market stocks tumbled to six-week lows yesterday on concerns that capital outflows will accelerate as Syria’s conflict intensifies and south-east Asian economies slow. India’s rupee and the Turkish lira weakened to all-time lows.
The Philippine Stock Exchange index fell 4 percent amid speculation that protests over discretionary government budgets will slow state spending. Thailand’s benchmark index sank to more than 20 percent below this year’s high, while the Jakarta composite index lost 3.7 percent. Dubai’s equities slid 6.4 percent, heading for the steepest decline since 2009. The rupee fell 2.4 percent and the lira slid 1.1 percent.
The MSCI emerging markets index fell 1.3 percent to 921.13 by 5.05pm in Hong Kong. Overseas investors have pulled $2.2 billion (R22.6bn) from equity markets in India, Indonesia, Thailand and the Philippines this month.
US Secretary of State John Kerry said Syria would be held accountable for using chemical weapons. “The situation in Syria isn’t helping investor sentiment,” Steve Sevidal at United Coconut Planters Bank in Manila said. “It’s a bad day for emerging markets.”
All 10 industry groups in the MSCI emerging markets index dropped, led by health-care and financial stocks. The broad gauge has lost 13 percent this year, compared with a 12 percent gain in the MSCI world index. The developing-nation index trades at 9.8 times projected 12-month earnings, lower than the world index’s 14 times.
Equity gauges in Kuwait, India, Saudi Arabia, Thailand, Abu Dhabi and Turkey fell at least 2 percent while Israel’s benchmark index sank 1.6 percent and its shekel weakened 1.2 percent to a six-week low.
The Hang Seng China enterprises index fell 0.9 percent. Shares of PetroChina, the nation’s largest oil company, were suspended in Shanghai and Hong Kong pending an announcement.
The Shanghai composite index rose 0.3 percent after a government report showed profit growth for industrial companies accelerated last month.
US President Barack Obama is under pressure from allies and Congress to go beyond denunciations and take military action against Syria’s President Bashar al-Assad in the wake of the August 21 attack that opposition groups say killed more than 1 300 people. The incident is forcing Obama to wade deeper into Syria’s civil war, a conflict in which he is reluctant to become involved.
Turkey’s lira weakened for a second day. There was no need for the nation’s funding rate to exceed 7.75 percent by year-end because raising it above that level would do damage to the economy, central bank governor Erdem Basci said.
The Borsa Istanbul National 100 index retreated 1.9 percent, heading for the lowest close since October last year. Turkish Airlines lost 3.2 percent as second-quarter profits missed estimates.
The Philippine Stock Exchange index sank to the lowest close since June 25 as Philippine Long Distance Telephone slid 1.8 percent. About 60 000 people gathered in the capital, Manila, on Monday to protest against the misuse of public funds after a government report this month found discretionary budgets from 2007 to 2009 were spent on dubious projects. State spending accounted for about 8.1 percent of the economy in the fourth quarter of last year, government figures show.
Bangkok’s SET index slumped 2.1 percent, poised for the longest losing streak since September 1998. – Bloomberg