Sept. 13 (Bloomberg) -- Emerging-market stocks fell, trimming the biggest weekly rally since June, as a drop in commodities sank producers from OAO Mechel to Gold Fields Ltd. Turkey’s benchmark equity gauge led losses among global indexes.
The MSCI Emerging Markets Index retreated 0.4 percent to 986.84, paring its advance for the week to 3.3 percent. The Borsa Istanbul National 100 Index declined 1.5 percent, the most among 94 world gauges tracked by Bloomberg, as bank shares dropped. OAO Mechel, Russia’s largest producer of coal for steelmakers, tumbled 3.8 percent, while Gold Fields plunged for a 10th day in Johannesburg. India’s rupee completed its biggest weekly gain since October 2009 amid inflow optimism.
Commodity shares led declines among the 10 groups in the measure for developing-nation shares as the U.S. and Russia started talks on a plan for Syria to surrender chemical weapons and investors weighed prospects for the Federal Reserve to cut stimulus. China’s stocks fell the most in a month, led by shippers and banks, after UBS AG downgraded China Shipping Development Co. and investors speculated a three-week rally on the Shanghai free-trade zone’s prospects was overdone.
“China and Fed policy remain two key risks,” Maarten-Jan Bakkum, a senior emerging-market strategist at ING Investment Management in The Hague, said by e-mail. “Markets have been quite strong earlier in the week, mainly because of better Chinese data and softer numbers from the U.S. that suggest that the Fed action next week can surprise positively.”
An anticipated reduction in stimulus by the Fed that has roiled the financial markets for months will be seen as no big deal if it goes ahead next week, according to a Bloomberg Global Poll of investors. Fifty-seven percent of those surveyed say they don’t expect a sudden change in the markets because investors already anticipate tapering action.
The measure for developing markets extended this year’s decline to 6.5 percent, trading at 10.5 times projected earnings, according to data compiled by Bloomberg. That trails the 13.9 valuation of the MSCI World Index.
The iShares MSCI Emerging Markets Index exchange-traded fund, the developing-nation ETF, rose 0.6 percent to $41.16. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, fell 3.5 percent to 24.29.
Brazil’s Ibovespa gained 0.9 percent, led by airline Gol Linhas Aereas Inteligentes SA, which surged 9.8 percent after saying a gauge of profitability rose as it cut flights.
The Micex Index lost 0.7 percent, trimming its weekly advance to 1.2 percent, as the central bank held rates unchanged for a 12th month. Mechel fell the most since July. Turkish shares pared the best weekly gain since December 2011 as Akbank TAS sank 1.9 percent. Czech Republic’s benchmark gauge dropped 1 percent, while Poland’s WIG20 Index snapped a five-day advance. Hungarian shares rallied.
The FTSE/JSE Africa All Shares Index trimmed its weekly rally as gold producers tumbled. Gold Fields declined 1.5 percent to the lowest level since 2008.
The Shanghai Composite Index fell for the first time in six days. Shanghai Pudong Development Bank Co. slid 2.8 percent, while China Shipping Development tumbled 5.3 percent.
India’s S&P BSE Sensex pared a weekly gain after the Prime Minister’s economic adviser said a tight monetary policy should be maintained until the rupee stabilizes and inflation cools. HDFC Bank Ltd., the country’s biggest lender by market value, sank. The rupee rose this week on optimism steps announced by the new central bank chief will boost the supply of dollars.
Manila Water Co. tumbled 15 percent, the most in more than four years in Philippine share trading, after the nation’s regulator rejected its petition to increase rates and ordered it to cut tariffs.
South Korea’s won completed a third weekly advance as a pickup in the economy prompted overseas investors to add to their holdings of the nation’s stocks. Thailand’s baht had its best week in five months.
The largest developing nations for the first time have the worst market opportunities as optimism for stronger growth shifts to the U.S. and Europe, according to a Bloomberg Global Poll. India fared the poorest, followed by Brazil, Russia and China, a worldwide poll of investors, analysts and traders who are Bloomberg subscribers showed this week.
“The BRICs will always be playing second fiddle to the developed economies,” said survey respondent Ben Kelly, an analyst at Louis Capital Markets in London. “The pro-growth monetary policy of the U.S. allowed emerging countries to thrive due to very low or negative real rates,” he said, referring to borrowing costs adjusted for inflation.
The premium investors demand to own emerging-market debt over U.S. Treasuries was unchanged at 339 basis points, according to JPMorgan Chase & Co.
--Editors: Rita Nazareth, Daliah Merzaban