Emerging-market stocks fell, set for the lowest in almost a week, after a decision on a second bailout for Greece was delayed and foreign investment into China declined.
The MSCI Emerging Markets Index (MXEF) fell 1.3 percent to 1,044.28 as of 8:47 a.m. in London. A close at that level would be the lowest since Feb. 10. The Shanghai Composite Index (SHCOMP) retreated 0.4 percent. Benchmark indexes in Russia, Turkey and South Africa lost at least 0.7 percent. The PX Index (PX) fell 1.8 percent in Prague as Erste Group Bank AG (RBAG) led declines.
Euro-area finance ministers extracted concessions from Greek political leaders to pave the way for the endorsement of an aid package next week, though Luxembourg Prime Minister Jean- Claude Juncker said “further considerations are necessary.” Ratings for global banks may be cut as lenders worldwide face risks of rising funding costs amid Europe’s debt woes, Moody’s said. Foreign direct investment in China fell for the third month in January, commerce ministry data showed.
“A Greek bailout is still quite important,” Daphne Roth, Singapore-based head of Asian equity research at ABN Amro Private Bank, said in a telephone interview today. “This is why we still maintain an ‘underweight’ on equities, even though the risk-on appetite has returned from the beginning of this year. If the Greece rescue package is not worked out properly, the impact on the market will be very huge.”
The Micex Index (MICEX) fell 1 percent in Moscow as oil slid as much as 0.7 percent in New York. The FTSE/JSE Africa All Share Index (JALSH) fell 0.7 percent in Johannesburg as metals prices slipped.
The ISE National 100 Index retreated 1 percent in Istanbul and Hungary’s BUX Index (BUX) lost 1.5 percent.
Erste Rating
Erste slid 4 percent in Prague after Moody’s Investors Service said in a statement today it may cut the lender’s standalone and long-term debt ratings. The review comes as part of a check of ratings at 114 financial institutions in 16 European countries, Moody’s said.
About 44 percent of emerging-market companies tracked by Morgan Stanley have missed analysts’ fourth-quarter earnings estimates, compared with 29 percent that have beaten them, Morgan Stanley analysts Jonathan Garner and Pankaj Mataney wrote in a report dated yesterday.
Taiwan’s Taiex Index (TWSE) slid 1.7 percent and South Korea’s Kospi Index (KOSPI) lost 1.4 percent.
Apple Suppliers
Catcher Technology Co. (2474) and Foxconn Technology Co. (2354), which make casings for Apple Inc.’s iPhones, slumped more than 6 percent in Taipei after Apple shares lost 2.3 percent yesterday. Catcher surged 11 percent the past two days after Apple’s shares closed above $500 for the first time. Foxconn closed at its highest level since July 26 yesterday.
Acer Inc. (2353), the world’s fourth-largest computer maker, increased 0.3 percent as it returned to profit in the fourth quarter after two quarters of losses. Net income in the latest period of NT$75 million ($2.5 million) missed the NT$176 million profit estimated by 18 analysts compiled by Bloomberg.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries increased two basis points, or 0.02 percentage point, to 385, according to JPMorgan Chase & Co.’s EMBI Global Index.
The Markit iTraxx SovX CEEMEA Index of eastern European, Middle East and Africa credit-default swaps climbed five basis points to 305, according to data provider CMA.
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February 16, 2012
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