Emerging-market stocks tumble to five-week low after China data

People are reflected in a board displaying stock indices in Tokyo. — Reuters pic
People are reflected in a board displaying stock indices in Tokyo. — Reuters pic

SYDNEY, Nov 11 — Emerging-market stocks fell for a fifth day as financial companies declined and China reported factory output data that trailed estimates. The Philippine peso halted a four-day slide.

The Shanghai Composite Index sank 0.8 per cent and Ping An Insurance (Group) Co led the Hang Seng China Enterprises Index to a five-week low. Hiwin Technologies Corp tumbled 7.8 per cent in Taipei after BNP Paribas SA downgraded the stock. Tencent Holdings Ltd rose 2.1 per cent in Hong Kong after posting record third-quarter profit. The peso and South Korea’s won rose at least 0.3 per cent versus the dollar.

The MSCI Emerging Markets Index fell 0.1 per cent to 832.79 at 1:47 pm in Hong Kong. China’s industrial output rose 5.6 per cent in October from a year earlier, below the 5.8 per cent median estimate of economists surveyed by Bloomberg and compared with September’s 5.7 per cent. The data shows the government’s pro-growth measures have yet to revive the nation’s old economic engines.

“The Chinese economy will need more stimulus; the slowdown in the economy should add more risk to the overall global economy, especially growth in emerging markets, which have relied heavily on demand from Chinese consumers,” said Komsorn Prakobphol, a senior investment strategist at Tisco Financial Group Pcl. “That’s why we are still more bullish on equities in developed markets than those in emerging markets.”

Stock valuations

The MSCI developing-markets index has dropped 13 per cent this year and trades at 11.1 times projected 12-month earnings, according to data compiled by Bloomberg. The MSCI World Index has fallen 0.9 per cent and is valued at a multiple of 16.

Four out of 10 industry groups in the emerging-stocks measure declined, led by financial and industrial shares. Ping An lost 1.4 per cent as the Hang Seng China Enterprises gauge slid 1.1 per cent. The Shanghai Composite Index fell for a second day. Hiwin had its steepest loss since June after BNP cut its rating on the stock to reduce from hold.

Tencent gained the most since October 5 after the Internet company’s net income climbed 32 per cent to 7.45 billion yuan (RM5.12 billion) in the three months ended September. Sales rose 34 per cent to 26.6 billion yuan, beating analyst estimates.

Malaysian stocks sank 1.4 per cent, poised for the steepest decline since September 21, as the market resumed trading after a holiday yesterday. Taiwanese equities dropped 1.4 per cent as Foxconn Technology Co tumbled 6.4 per cent after reporting lower sales in October. — Bloomberg

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