Europe’s emerging-market stocks fell the most in more than three months after reports showed the recession deepened more than economists anticipated in Hungary and the euro area.
Chinese banks and developers rallied in Hong Kong on the first day of trading this week.
OTP Bank, Hungary’s largest lender, dropped for the first time in five days.
Impala Platinum, the second-largest producer of the metal, headed for its biggest decline in almost four months after net income tumbled 78 percent in the first half, missing estimates.
China Resources Land and China Minsheng Banking rose more than 3 percent in Hong Kong.
The MSCI Emerging Europe, Middle East and Africa Index sank 1.4 percent, the biggest decline since October 23 on a closing basis, at the 12:45 p.m. in London.
The euro-area economy had its worst performance in the final three months of last year since the first quarter of 2009.
Hungary’s forint led currencies lower, weakening 0.8 percent versus the euro after gross domestic product tumbled the most in three years.
“A lot of eastern European countries happen to have their markets very closely tied to western Europe and that is not a very good situation to be in,” Jan Dehn, co-head of research at Ashmore Investment Management Ltd., said in an interview in London yesterday.
“If you are looking at the year as a whole, the two regions I like the most are Asia and Latin America.”
The MSCI Emerging Markets Index was little changed at 1,064.95 as declines in Europe offset earlier gains Asia.
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong jumped 1.5 percent.
Chinese tourists to Macau surged over the Lunar New Year holiday boosted confidence in the country’s consumption outlook.
Stocks Slide
Benchmark gauges in Russia, Turkey, Poland, Hungary, the Czech Republic and Brazil sank more than 1 percent.
The euro- area economy shrank 0.6 percent in the fourth quarter from the previous three months.
The number was worse than the 0.4 percent contraction forecast by economists in a Bloomberg survey.
Hungary’s GDP fell 2.7 percent in the October-to-December period from a year earlier, compared with 1.9 percent estimated in a Bloomberg survey.
OTP sank 2 percent in Budapest, the most in more than a week.
KGHM Polska Miedz SA, Poland’s sole copper and silver producer, lost 1.3 percent, leading declines by index points.
OAO Gazprom, Russia’s biggest energy producer, fell 1.6 percent, heading for the biggest drop since November 13.
Longest Recession
CEZ AS, the largest Czech power producer, slid 1.3 percent.
The nation’s economy shrank in the final three months of 2012, the fourth consecutive quarterly contraction and marking the longest recession on record.
Turk Ekonomi Bankasi AS, the Turkish bank part-owned by BNP Paribas SA, fell 1.5 percent, the first drop in three days, after 2012 net income missed analysts’ estimates.
Impala Platinum dropped 4.5 percent in Johannesburg, the most since Oct. 23 on a closing basis.
Net income plunged because of a work stoppage at Rustenburg, where production fell 25 percent, and costs per refined ounce surged 52 percent, Johannesburg-based Impala said.
Russia’s Micex Index retreated 1 percent, reversing yesterday’s gains, and the ruble weakened for a second day.
OAO Gazprom, Russia’s biggest energy producer, fell 1.8 percent, heading for the biggest drop since November 13.
VTB Group, Russia’s second-largest lender, surged as much as 5.1 percent and last traded 1.3 percent up, heading for the highest close since January 29.
The Telegraph reported Qatar’s sovereign wealth fund is in advanced talks to invest as much as $3.5 billion in VTB.
As part of the deal, VTB will issue $1.5 billion in new equity and $1.5 billion of mandatory convertible bonds to the wealth fund, the Telegraph said, citing unidentified people familiar with the deal.
Trailing Gains
The MSCI Emerging Markets Index has risen 0.9 percent this year, trailing a 5.3 percent gain in the MSCI World Index of developed nations.
The gauge of developing nations trades for 10.4 times estimated profit, compared with the MSCI World’s multiple of 13.8, data compiled by Bloomberg show.
The extra yield investors demand to own emerging-market debt over US Treasuries rose one basis point, or 0.01 percentage point, to 273 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.
Health-care and utility companies lost at least 0.6 percent, leading declines among the 10 industry groups in the MSCI Emerging Markets Index.
The gauge of financial stocks gained the most, rising 0.3 percent.
China Resources, a state-owned developer, rose 3.3 percent, heading for the sharpest gain since January 14.
China Minsheng Bank, the nation’s first privately-owned lender, climbed 5.8 percent.
China Story
“China is a good cyclical story -- consumption, retail sales and manufacturing are improving,” said Julian Tarrobago Jr., who helps manage about $1 billion as portfolio manager at Manila-based ATR Kim Eng Asset Management Inc.
“Europe will still likely be in a recession but that is an improvement because investors before were just looking at sovereign default scenarios.”
The Hang Seng China Enterprises Index gained the most since January 18, as trading resumed following Lunar New Year holidays. China and Taiwan are shut for the week.
The Jakarta Composite Index rose 0.4 percent to a record with trading volume 117 percent above the 30-day average. The BSE India Sensitive Index, or Sensex, fell 0.6 percent.
Haier Electronics Group Co. jumped 7.7 percent in Hong Kong, the most since April 2012.
Mainland visits to Macau increased 36 percent from a year earlier on the third day of the week of the Lunar New Year Holiday that began February 10, according to data from Macau government tourist office.
‘Affluent Lifestyle’
The report “is a testament of the improving consumer confidence in China that there will be jobs and an affluent lifestyle can be sustained,” Tarrobago said.
The Hang Seng China Enterprises Index has rallied 31 percent from an 11-month low reached on September 5 amid signs a recovery in the Chinese economy is gaining traction.
Gross domestic product rose 7.9 percent in the fourth quarter from a year earlier, the first acceleration in two years.
PT Bumi Resources jumped 26 percent on optimism that a February 21 shareholder meeting of Bumi Plc, its largest shareholder, will resolve an owner dispute.
Bumi Plc’s shareholders will vote on a proposal to replace the current board including its chairman and chief executive officer.
“The market is expecting the outcome of the meeting in London to be a positive one and would allow the separation of Bumi Resources from Bumi Plc,” Wilianto Ie, head of research at PT Nomura Indonesia, said by phone.
MSCI Additions
People’s Insurance, New China Life Insurance and Greentown China rose at least 2 percent in Hong Kong after MSCI Inc. said it will add the stocks to its China index.
The changes take effect after February 28, according to MSCI, whose indexes are tracked by investors with about $7 billion in assets.
Universal Robina Corp., the Philippines’ largest snack-food maker, rose 2.4 percent to a record after MSCI said it will raise the company’s representation in the MSCI Philippines Index. - Bloomberg