LONDON, Sept 9 — Emerging-market currencies weakened and the benchmark stock index fell for a fourth day amid concern US interest rates may rise faster than investors anticipated.

 

Malaysia’s ringgit sank the most in a week versus the dollar. South Africa’s rand and Turkey’s lira lost at least 0.5 per cent. The Jakarta Composite Index retreated from a record, paced by a 3.7 per cent slide in PT United Tractors. The Philippine Stock Exchange Index slid from a 15-month high. OAO Magnit led a 0.5 per cent gain in Russian shares after European Union governments put on hold new sanctions.

The MSCI Emerging Markets Index fell 0.4 per cent to 1,090.82 at 3:40 p.m. in Hong Kong, poised for the longest losing streak since Aug. 8. Low volatility across financial markets may signal investors are underestimating how quickly the Federal Reserve will raise interest rates, according to researchers at the San Francisco Fed.

“Emerging markets are weakening on concern that the Fed might raise rates sooner than what investors previously expected,” Agus Yanuar, President Director at PT Samuel Aset Manajemen, said by phone in Jakarta.

The ringgit weakened 0.5 per cent, while the Philippine peso lost 0.4 per cent. The rand declined to the lowest level since March 24 and the lira fell for a second day. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, climbed 0.2 per cent after gaining 0.7 per cent yesterday to its highest close since July 10, 2013.

Stock valuations

Fed officials in their June economic forecasts predicted their target interest rate will be 1.13 per cent at the end of 2015 and 2.5 per cent a year later. They are set to release updated projections Sept. 17.

The developing-markets gauge has gained 8.9 per cent this year and trades at 11.4 times 12-month estimated earnings, according to data compiled by Bloomberg. The MSCI World Index has risen 4.8 per cent and is valued at a multiple of 15.

Nine out of 10 industry groups in the MSCI Emerging Markets Index fell today, led by industrial companies. The Jakarta Composite lost 0.8 per cent. United Tractors fell to the lowest level since April 28, the biggest drag in the Indonesian gauge, after Goldman Sachs Group Inc. downgraded the stock. PT Semen Indonesia sank 2.2 per cent in Jakarta.

The Philippine equity measure dropped 0.8 per cent, paced by losses in Ayala Land Inc. Vietnam’s VN Index declined 1.9 per cent, the most since May 12.

The S&P BSE Sensex index slid 0.3 per cent, led by Infosys Inc., after the Indian equity gauge rose to a record yesterday. South Korean and Hong Kong markets were shut for holidays.

Russian shares

Magnit, Russia’s biggest food retailer, added 1 per cent after its August sales jumped 34 per cent from a year earlier. The Micex Index advanced for a fifth day in six. EU governments abruptly put on hold for at least a “few days” new sanctions against Russia, allowing more time to assess the viability of a cease-fire in Ukraine without risking further trade retaliation by the Kremlin.

The EU’s second package of economic penalties against Russia was delayed late yesterday in Brussels by the bloc’s 28 governments, which approved the measures in principle while stopping short of giving the green light for their publication in the Official Journal and entry into force.

Taiwan’s Taiex Index climbed 0.3 per cent, led by gains in Hon Hai Precision Industry Co., an assembler of Apple Inc.’s iPhones. Inotera Memories Inc. tumbled 5.5 per cent after the Economic Daily said the company’s stock price is under pressure as prices of dynamic random-access memory chips fall.

The Shanghai Composite Index was little changed as markets in mainland China resumed after a holiday. Data yesterday showed an unexpected drop in imports fueled a record trade surplus in August. China’s yuan rose to a six-month high as the central bank raised its fixing by the most in almost four years. — Bloomberg