Manila - Emerging-market stocks fell for a second day as speculation grew the US will cut stimulus.
India’s benchmark gauge dropped the most in two years while a trading error roiled Chinese markets.
State Bank of India, the nation’s largest lender by assets, sank to a four-year low as the benchmark index tumbled on concern central bank measures to bolster the rupee aren’t working.
The Shanghai gauge lost 0.6 percent after jumping as much as 5.6 percent.
Egyptian bonds headed for the steepest three-day drop in June 2012 as the Muslim Brotherhood called for rallies after the killing of its supporters by security forces.
The MSCI Emerging Markets Index slid 0.2 percent to 958.23 at 2:07 p.m. in London, paring this week’s gain to 0.8 percent.
The number of people in the US continuing to claim jobless benefits unexpectedly fell last week to the lowest level in almost six years, data showed yesterday.
A Reserve Bank of India move on August 14 to cut investments local companies can make without approval failed to support the rupee.
“Investors are bracing for the prospect that tapering of stimulus will come sooner rather than later,” said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc.
“As the US economy improves, we could see more funds flowing out of emerging markets and supporting a strong dollar.”
Fed Stimulus
The Federal Reserve is expected to cut bond purchases next month, according to 65 percent of economists in a Bloomberg survey from August 9-13.
Fed Chairman Ben S. Bernanke told Congress last month that any reduction in stimulus would depend on the economy’s performance.
Data today showed housing starts increased last month before a report that may indicate consumer confidence improved in August.
India’s benchmark index dropped 4 percent, the most since September 22, 2011.
China’s stocks were roiled by a trading error at Everbright Securities Co. that spurred a 53 percent surge in volumes and sent the Shanghai Composite Index to its biggest intraday gain since March 2009.
The yield on Egypt’s dollar bond due April 2020 jumped 19 basis points to a five-week high of 9.21 percent, according to price quotes compiled by Bloomberg.
Since the August 14 assault on two squares in Cairo and Giza, where Muslim Brotherhood supporters were camped out, the bond price has lost 4.4 percent, the most since June 2012.
Brazil’s Ibovespa index added 0.3 percent.
Russia’s Micex Index dropped 0.3 percent as OAO Lukoil, the nation’s second- largest oil company, and OAO Sberbank, the biggest bank, both declined for a second day.
Gold Stocks
AngloGold Ashanti Ltd. and Harmony Gold Ltd. jumped more than 8 percent in Johannesburg as bullion headed for its biggest weekly gain in more than a month.
The FTSE/JSE Africa Gold Mining Index advanced 6.8 percent.
Turkcell Iletisim Hizmetleri AS, Turkey’s biggest mobile- phone operator, rose 1.3 percent.
Turkey’s Capital Markets Board appointed Mehmet Bostan and Bekir Pakdemirli to the phone operator’s board yesterday.
The appointments pave the way for release of second-quarter results, according to Oyak Securities.
The MSCI Emerging Markets Index has declined 9.2 percent this year, compared with a 12.9 percent gain in the gauge for shares in developed economies, as slowing growth in China and speculation the US will ease stimulus spurred sales of riskier assets.
Shares in the MSCI developing-nations gauge are trading at 10.1 times projected 12-month profit, compared with the MSCI World Index’s 13.7 times, data compiled by Bloomberg show.
State Bank of India fell 3.3 percent to the lowest close since July 2009.
The rupee fell 0.5 percent today even as the Reserve Bank of India tightened restrictions on overseas investments by local companies and cut the ceiling on remittances by residents.
High Cost
“The cost that we are paying as an economy for the stabilization of the rupee is too high, because it has not helped the rupee as much but has harmed the economy,” Rashesh Shah, chairman of Edelweiss Financial Services Ltd., said in an interview with Bloomberg TV India today.
“Any optimism about future economic growth and corporate earnings is at least two or three quarters away.”
The Shanghai Composite Index fell 0.6 percent.
The benchmark gauge jumped from a loss of as much as 1 percent to a gain of 5.6 percent in two minutes during the morning session as 16 of the measure’s 20 biggest companies by weighting increased by the 10 percent daily limit. Everbright, China’s ninth-largest brokerage by assets, said it experienced a trading error.
The exchange said trades will be settled as normal and Everbright said it’s investigating.
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose for a sixth day, the longest winning streak since the six days through Jan. 3.
The Jakarta Composite Index fell 2.5 percent, the sharpest loss since July 8, as the rupiah sank to a four-year low and amid concerns bank lending will slow after the central bank imposed new reserve requirement rules.
PT Bank Rakyat Indonesia, the nation’s second-largest lender, retreated 6 percent, the biggest loss since June 20. - Bloomberg News