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By Bloomberg

Emerging-market stocks fell, with the benchmark gauge heading for its first back-to-back annual losses in 12 years, as energy companies retreated with oil. Russia’s ruble rebounded from a two-day drop.

PetroChina Co. and OAO Lukoil sank at least 2.9 percent as oil fell to a five-year low. Dubai’s DFM General Index slid 4.9 percent to lead Gulf equity gauges lower. Huadian Power International Corp. tumbled 4.7 percent in Hong Kong after announcing a share sale plan. The ruble rose 3 percent versus the dollar, while China’s yuan gained the most since March.

The MSCI Emerging Markets Index lost 0.6 percent to 953.27 at 8:17 a.m in London. The gauge has fallen 4.9 percent this year as a slump in oil spurred a rout in commodity producers and speculation of higher U.S. interest rates cut demand for riskier assets. A measure of developing-nation energy shares is poised for its steepest annual drop since 2008. Reports this week may show China’s economy is losing momentum.

“Investors have been a bit cautious this year as there may have been a move towards U.S. dollar denominated assets, while lower oil prices have hurt oil companies,” said Marc Djandji, Ho Chi Minh City-based head of institutional sales at VPBank Securities Co. “Markets are a bit quiet these days as many investors are on holidays.”

The developing-nation gauge trades at 11.1 times projected 12-month earnings, compared with its three-year average of 10.4, data compiled by Bloomberg show. The MSCI World Index has risen 4.1 percent this year and is valued at a multiple of 15.7.

Energy Shares

Nine out of 10 industry groups in the emerging-markets measure fell, with a gauge of energy shares poised for a 29 slump this year. Hong Kong’s Hang Seng China Enterprises Index retreated 1.5 percent, led by PetroChina, which slid by the most since Dec. 9. Lukoil lost 3.5 percent in Moscow as the Micex Index declined 2.1 percent. The ruble climbed for the first time in three days.

Dubai’s equity gauge slid for a second day as Emaar Properties PJSC tumbled 5.4 percent. Saudi Arabia’s Tadawul All Share Index sank 3.3 percent, while Qatar’s stock index decreased 2.2 percent.

Oil sank for a fourth day amid speculation that U.S. crude inventories will stay at the highest level since June, offering no relief from a global glut.

Huadian Power, a Chinese electricity generator, dropped the most since Dec. 5. The company said it will sell shares worth as much as $1.15 billion to fund two power projects, and that it’s studying the purchase of assets from its state-owned parent.

Yuan Gains

The yuan strengthened 0.3 percent. An official Purchasing Managers’ Index for December is expected to indicate Chinese manufacturing failed to expand for the first time in more than two years, based on the median estimate of economists surveyed by Bloomberg before the data are released on Jan. 1. A private report tomorrow will probably show the first contraction since May, a separate poll showed.

The Shanghai Composite Index slid from a five-year high, losing 0.1 percent. The Chinese gauge is headed for its steepest monthly advance since April 2007 amid speculation the government will take measures to bolster economic growth.

Hyundai Motor Co. sank 1.5 percent, poised for its first annual loss since 2008. The Kospi index dropped 0.6 percent and the won ended a three-day gain. Data today showed South Korea’s industrial output in November fell 3.4 percent from a year earlier, the most since January.

Malaysia’s ringgit weakened 0.1 percent to the lowest level since September 2009, while the Thai baht and Indian rupee strengthened 0.2 percent.