Most emerging-market stocks climbed as Hyundai Motor Co. (005380) led a rally in consumer-discretionary shares. Chinese equities posted the biggest two-day retreat in 18 months while Russia’s ruble gained for a fourth day.
Hyundai Motor rose 2 percent in Seoul after Yonhap News said the carmaker may boost dividends. Emaar Properties PJSC (EMAAR) jumped for the fourth time in five days as stocks in Dubai gained 3 percent. The Nigerian Stock Exchange All Share Index advanced to a three-week high. The Shanghai Composite Index slid 2 percent amid bets China is seeking to cool the world’s best-performing major stock market over the past month.
The MSCI Emerging Markets Index was little changed at 951.19, with 348 stocks higher and 301 lower. Crude dropped after surging Tuesday on data that showed the US economy grew at the fastest pace in more than a decade. The ruble gained 2 percent after falling as much as 1.8 percent. Standard & Poor’s yesterday said it may lower Russia’s credit rating.
“As S&P has clearly shown, the risk of downgrade has increased significantly, given that Russian authorities have been unable to stabilize the FX market and shield the economy/banking sector from the perfect storm,” Moscow-based ING Groep NV analyst Dmitry Polevoy said in an e-mail. Next year “it will be a recessionary environment, with some more time with uplifted inflation, rising fiscal challenges and high ruble volatility. So, key is how the government will react,” he said.
Junk status
The ruble rebounded as tax payments and speculation Russian exporters are being pushed to sell foreign currency outweighed concern that the sovereign’s credit rating will be cut to junk. S&P said it’s considering cutting Russia to below investment grade for the first time in a decade as a looming recession spurs concern that the nation’s banks will face mounting bad loans. The Micex Index added 0.2 percent after three days of losses.
Brazil’s market and most bourses in emerging Europe are closed today or a public holiday. Petroleo Brasileiro SA’s $2.5 billion of 2024 notes declined 0.52 cents to 95.69 cents on the dollar. Moody’s Investors Service yesterday said it is reviewing the Brazilian state-run oil producer’s credit rating for a possible downgrade.
The Indian rupee retreated 0.4 percent versus the dollar. The Romanian leu strengthened 0.4 percent against the euro.
The MSCI developing-nation equities gauge has dropped 5.1 percent this year and trades at 11.1 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has climbed 3.9 percent and is valued at a multiple of 15.6.
Chinese stocks
Emaar Properties, developer of the world’s tallest skyscraper in Downtown Dubai, rose 2.9 percent as the emirate’s shares rallied after a 3.4 percent slump Wednesday. The Nigeria Stock Exchange All Share Index jumped 5 percent.
Hyundai Motor climbed the most since December 4 after Yonhap said the board will decide on a dividend increase early next year. The Kospi index gained 0.4 percent.
The Shanghai Composite slid 5 percent in two days. Citic Securities Co. and Haitong Securities Co. both lost 9.1 percent today. China’s securities regulator this month cautioned investors on share purchases and started inspecting some brokerages’ margin finance businesses.
The premium investors demand to hold emerging-market debt over US Treasuries narrowed three basis points to 339 basis points, according to JPMorgan Chase & Co. indexes.
