July 16 (Bloomberg) -- Most emerging-market stocks retreated as retail purchases in the U.S. unexpectedly fell and the International Monetary Fund lowered its global growth forecast, dimming the outlook for exporters.
The MSCI Emerging Markets Index was little changed at 926.67 at 10:57 a.m. in New York, with 375 companies falling and 359 advancing. Brazil’s Bovespa stock index fell from a one-week high and mining companies Vale SA and MMX Mineracao & Metalicos SA fell on concern China’s slowdown may hurt exports. The Shanghai Composite Index fell to its lowest close since March 2009 and the BSE India Sensitive Index, or Sensex, posted a fourth day of losses.
Retail sales in the U.S. fell for a third straight month, posting a 0.5 percent drop. The decline was worse than the most- pessimistic forecast in a Bloomberg News survey in which the median projection called for a 0.2 percent rise. The IMF cut its 2013 forecast for global growth to 3.9 percent from 4.1 percent and reduced its projection on China’s growth to 8 percent from 8.2 in 2012.
“The retail sales number is a clear negative and not a good sign for consumer growth,” Greg Lesko, who helps oversee about $700 million at Deltec Asset Management in New York, said in a telephone interview. “Emerging markets trade along the lines of global growth expectations and today that’s not a positive.”
MSCI’s index of developing nations, which has gained 1.1 percent this year, trades at a multiple of 10.1 percent estimated earnings, compared with 12.3 for the developed-nation gauge, according to compiled by Bloomberg.
EM ETF Drops
The IShares MSCI Emerging Markets Index exchange-traded fund, the ETF tracking developing-nation shares, dropped 0.6 percent to $38.26.
The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, gained 2.5 percent to 26.99.
The Bovespa slid 0.8 percent. Vale fell 0.7 percent while MMX tumbled 3.9 percent. OGX Petroleo & Gas Participacoes SA, the oil company controlled by billionaire Eike Batista, retreated 5.1 percent as Deutsche Bank AG lowered its recommendation to sell from hold.
Russia’s benchmark Micex gauge rose 0.4 percent, led by Federal Grid Co., which gained 2.6 percent.
South Africa’s FTSE/JSE Africa All Share Index dropped 0.2 percent as commodities including copper and oil declined. BHP Billiton Ltd., the world’s biggest resources company, fell 0.8 percent.
Hungary’s BUX Index rose 1.2 percent, led by FHB Mortgage Bank Nyrt., which jumped 1.7 percent.
The Shanghai Composite Index fell 1.7 percent, its lowest close since March 2009. Suning Appliance Co., China’s biggest electronics retailer by market value, slid the most on record in Shanghai after estimating profit dropped as much as 30 percent in the first six months of the year. India’s Sensex dropped 0.6 percent.
China’s central bank may cut interest rates by as much as one percentage point in the coming year to spur lending, the swap market signals. China’s State Council may this week give details of easing measures to support growth after provincial visits by Wen and Vice Premier Li Keqiang, Nomura Holdings Inc. said in a note today.
State Bank of India, the country’s largest lender, advanced 1 percent on speculation of a rate cut. Reserve Bank of India Governor Duvvuri Subbarao announces his next rate decision on July 31, following a 0.5 percentage-point reduction in April.
ZTE, BYD
ZTE Corp., a Chinese telecommunications equipment maker, dropped 16 percent, the most since October 2008, after the company said first-half net income may be between 154 million yuan ($24 million) and 308 million yuan, sliding from 769.3 million yuan a year earlier.
BYD Co., the automaker backed by investor Warren Buffett, tumbled 5.9 percent in Hong Kong. China’s automobile dealers will increase incentives and discounts as they struggle with a worsening glut in the world’s biggest vehicle market, according to Cheng Xiaodong, head of a unit that monitors auto prices at the National Development and Reform Commission.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell one basis point, or 0.01 percentage point, to 357, according to JPMorgan Chase & Co.’s EMBI Global Index.
