Emerging Stocks Drop as Oil Sinks Energy Shares; Ringgit Weakens
Emerging-market stocks headed for their first decline in five days as energy producers dropped with oil and concern grew over the outlook for the global economy. The Malaysian ringgit paced losses for developing-nation currencies.
The MSCI Emerging Markets Index decreased the most in a week, with nearly two shares falling for each one that gained. PetroChina Co. and Cnooc Ltd., China’s largest listed oil producers, slid for a second day in Hong Kong. The ringgit declined after Swiss authorities said it’s pursuing an investigation into alleged diversion of funds from a Malaysian state-investment company. The Shanghai Composite Index climbed after the central bank injected cash into the financial system before next week’s holidays.
Oil prices have erased last week’s rally on speculation U.S. stockpiles are continuing to expand amid a global glut. Developing-nation stocks are retreating from the biggest four-day gain since October as optimism that global central banks from Japan to Europe are ready to do what’s needed to spur growth faded. The Reserve Bank of India left the benchmark interest rate unchanged at this year’s first policy meeting, as expected by most economists in a Bloomberg survey, after lowering them four times in 2015.
“It’s still a volatile market,” said Rafael Palma Gil, a Manila-based trader at Rizal Commercial Banking Corp., which oversees about $1.8 billion in assets. “While central banks have become relatively more accommodating, this stance doesn’t remove the concern of a global economic slowdown, with the weakness in China.” Rizal Bank is buying stocks on declines and selling the rallies, Gil said.