Emerging markets drop to six-week low as commodity stocks slide

Mexican Stocks

The benchmark IPC index of 35 Mexican companies dropped 0.1% as the country’s industrial production fell in December for the first time in three years.

Petroleo Brasileiro SA’s American depositary receipts fell 1.8% in New York after newspaper O Estado de Sao Paulo reported that the state-run oil company is warning the government that its debt ratios may rise. ADRs of Beijing-based Ambow Education Holding Ltd. tumbled 11% to trade at a record low, while Pactera Technology International Ltd. slipped 3%.

Akbank and Turkiye Garanti Bankasi AS dragged Turkey’s ISE National 100 Index 1.8% lower. India’s Sensex slipped 0.1%, falling for an eight day, the longest losing streak since November 2011, amid economic growth and corporate earnings concerns. The rupee touched the lowest level in two weeks on speculation capital inflows have slowed.

Trading volumes on the Jakarta gauge were 25% below the 30-day average and Micex trading was 20% less than average.

Consumer Stocks

Venezuelan government bonds rallied, with benchmark yields falling to a five-year low, after the government devalued the bolivar, helping cut the budget deficit by generating more local currency from its oil exports. President Hugo Chavez, who is recovering from cancer surgery in Cuba, ordered his government to weaken the exchange rate by 32% to 6.3 bolivars per dollar starting Feb. 13, Finance Minister Jorge Giordani told reporters last week.

Consumer companies Arcos Dorados Holdings Inc., Coca-Cola Femsa SAB, Grupo Nutresa SA, industrial companies Masisa SA and Copa Holdings SA and MercadoLibre Inc., operator of an online trading site, have “significant exposure to Venezuela,” Morgan Stanley said in an e-mailed report today.

The Czech koruna was almost unchanged versus the euro after its best weekly gain in 14 months, as slower-than-expected inflation renewed speculation the central bank may weaken the currency. The statistics office in Prague said today the consumer-price index grew at the slowest pace in 16 months in January, missing analyst estimates. Last week, the koruna rallied 1.8% after Governor Miroslav Singer signaled the need to sell the currency to ease monetary conditions is “less urgent.”

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