Emerging-market stocks dip despite Chinese rally; Japan's recession deepens
The majority of emerging-market stocks dipped, as declines by technology and consumer companies overshadowed a rally by Chinese shares.
About three stocks fell for every two that rose on the MSCI Emerging Markets Index, which slid less than 0.1 percent to 985.32 at 2:24 p.m. in Hong Kong, says Bloomberg. The economic outlook for Asia is weakening at the same time as U.S. growth picks up, prompting investors to switch to American securities, according to PT MNC Asset Management.
“The Federal Reserve may raise rates sooner than previously expected,” said Akbar Syarief, a Jakarta-based fund manager at MNC Asset Management.
Imports in China unexpectedly dropped in November and exports trailed estimates, according to today´s data, while Japan’s recession was deeper than initially estimated.
Employers in the U.S. added 321,000 jobs in November, the most since January 2012, driving wage gains.
Chinese stocks shrugged off the trade data on optimism shares will extend their world-beating rally. The Shanghai Composite Index surpassed 3,000 for the first time since 2011, while the CSI 300 of the nation’s largest companies extended gains to 24 percent during the 12-day advance.
All industry groups bar financial companies fell on the developing market measure.
An index of technology shares fell 0.5 percent. Infosys headed for its biggest loss in two months. Four founders are selling about 65 billion rupees ($1 billion) of stock in the company, according to a person with knowledge of the matter.
MediaTek Inc. lost 4.8 percent in Taipei, the biggest drag on the MSCI Emerging Markets Index. China Mobile Ltd. retreated 0.9 percent in Hong Kong.
Anta Sports headed for its lowest close since Aug. 1. Chairman Ding Shizhong sought to allay worries in an investor conference call Dec. 4, in which he denied involvement with a former government official who media reports said is under corruption investigation.
Shares of Prada S.p.A. dropped 7.4 percent in Hong Kong, poised for its steepest retreat since October 2011, after reporting a bigger-than-expected drop in third-quarter profit.
MSCI’s emerging-market gauge has lost 1.8 percent this year and trades at 11.2 times 12-month projected earnings, according to data compiled by Bloomberg. The MSCI World Index of developed nations has gained 4.6 percent and is valued at 15.6 times earnings.
Citic Securities and Haitong Securities, the nation’s biggest brokers, jumped by the most on record in Hong Kong. Ping An Insurance Co. advanced 5.5 percent, poised for its highest close since July 2011. The Hang Seng China Enterprises Index rose 2.8 percent.
The rally for Chinese stocks isn’t over because the government will introduce more reforms, valuations are cheap and there are expectations of more policy easing, said ABN Amro Private Banking’s Daphne Roth.
“There’s a lot of buying from retail investors,” said Roth, head of Asian equity research at ABN Amro, which oversees about $230 billion.
“Short term, if I look at the technicals, it’s still powering ahead. I expect it to rise for the rest of the year. For the mid-to-long term, we are still positive.”
The ringgit retreated 0.9 percent to the lowest level since September 2009. The rupiah fell 0.5 percent after touching the weakest level since December 2008, prices from local banks show.
In the Philippines, government offices were shut while trading of stocks, bonds and currencies was suspended for the day as tropical storm Hagupit approached Manila.
Vietnam’s VN Index and the Jakarta Composite index both retreated 0.7 percent.
