Dec. 10 (Bloomberg) -- The iShares MSCI Emerging Markets Index exchange-traded fund fell for the first time in three days on concern U.S. lawmakers will fail to reach a budget deal. South Africa’s rand jumped after surprising factory data.
The developing-nation ETF slipped 0.3 percent to $41.86 at 10:31 a.m. in New York. The MSCI Emerging Markets Index dropped less than 0.1 percent to 1,012.55 as 423 stocks retreated, while 320 gained. The Philippine Stock Exchange Index led losses among 94 global equity gauges tracked by Bloomberg on inflation concern. Brazil’s Ibovespa snapped a three-day rally after industrial output in China, its top trading partner, trailed estimates. The rand strengthened as much as 1.2 percent.
Stocks joined a decline in U.S. equities on speculation a budget deal could fall apart amid opposition from Republicans who don’t trust plans for future savings and Democrats who say it punishes federal workers by requiring they contribute more to pension plans. An agreement would mark a reprieve in three years of fiscal standoffs and, if Congress passes it, would stave off the risk of another shutdown for at least a year or two.
Utility and industrial shares in the MSCI Emerging Markets Index retreated, while commodity companies advanced. The broad measure trades at 10.6 times projected earnings, compared with the valuation of 14.5 for the MSCI World Index. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, advanced 0.7 percent to 25.04.
Brazil’s Ibovespa reversed gains as Gerdau SA, the South American country’s biggest steelmaker by market value, declined on concern a stronger real will slow exports and after company Chairman Jorge Gerdau Johannpeter said the market is still suffering from overcapacity. Homebuilder Gafisa SA was the best performer on the equity gauge as investors pared bets on higher borrowing costs in Brazil.
Most Russian shares fell as OAO Gazprom, the nation’s biggest company, retreated, while food retailer OAO Magnit advanced. Poland’s WIG20 Index dropped to the lowest level in two months, while the Czech PX Index declined for a seventh day in the longest slide since November 2011.
South Africa’s rand strengthened against the dollar after reports showed manufacturing production unexpectedly expanded and mining output rose more than estimated. Foreign investors bought a net 2 billion rand ($194 million) on bonds in the two days through yesterday, snapping 13 days of outflows, the longest stretch of net sales on record, according to data from the Johannesburg Stock Exchange.
China’s benchmark stock index fell as shipbuilder China CSSC Holdings Ltd. slid 5.3 percent and TBEA Co., a maker of electrical transformers, dropped 2.1 percent. Qingdao Haier Co. paced an advance by appliance makers after Alibaba Group Holding Ltd. agreed to invest HK$2.82 billion ($364 million) in the company’s affiliates.
India’s S&P BSE Sensex dropped from a record, led by power utilities and capital goods companies. NTPC Ltd., the nation’s top electricity generator, posted its steepest loss since January 2008. Larsen & Toubro Ltd. slumped the most in two months, pacing losses in the S&P BSE India Capital Goods Index.
The Philippine Stock Exchange Index sank to a three-month low and bonds fell on concern inflation will accelerate after regulators allowed the nation’s biggest power supplier to increase prices by a record.
The premium investors demand to own emerging-market debt over U.S. Treasuries was unchanged at 331 basis points, according to JPMorgan Chase & Co.
--Maria Levitov. Editors: Rita Nazareth, Daliah Merzaban