Azernews.Az

By Bloomberg

Emerging-market stocks fell for a second day as energy companies slid and Chinese industrial companies’ profits slumped. Ruble forwards declined after Russia’s foreign- currency credit rating was cut to junk by Standard & Poor’s.

PetroChina Co. dropped 1.3 percent in Hong Kong to lead energy shares lower after oil decreased 1 percent yesterday. Zijin Mining Group Co. sank 3.6 percent as the Shanghai Composite Index retreated from a five-year high. Ruble forwards lost 2.3 percent. India’s S&P BSE Sensex headed for a record high as Prime Minister Narendra Modi and President Barack Obama reached an agreement that could spur nuclear energy projects.

The MSCI Emerging Markets Index lost 0.3 percent to 986.12 at 1:20 p.m. in Hong Kong. Data today showed Chinese industrial profits slid 8 percent in December from a year earlier, the most since at least October 2011. Oil traded near the lowest level in almost six years. S&P cut Russia’s rating to BB+, putting it below investment grade for the first time in a decade.

“The low crude oil prices will continue to have pressure on energy stocks, while growth in China and Europe will still weigh on the overall global economy,” Ekpawin Suntarapichard, an investment strategist at SCB Securities Co., said by phone from Bangkok. “Equity markets should be very volatile.”

The developing-nation gauge has gained 3.1 percent this year and trades at 11.6 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has risen 0.3 percent and is valued at a multiple of 16.

Energy Shares

Eight out of 10 industry groups in the emerging-markets index dropped, led by energy stocks. PetroChina fell for a second day as Hong Kong’s Hang Seng China Enterprises Index lost 1.6 percent. The Shanghai Composite slid 2.6 percent, its first retreat in six days, as Zijin Mining Group Co. sank the most in a week, pacing declines in industrial companies.

Russian stocks dropped and the ruble closed at a record low on Monday after S&P cut its sovereign rating one step with a negative outlook. The ratings company said in a statement that the cut reflects its view that the country’s “monetary policy flexibility has become more limited and its economic growth prospects have weakened.”

The Sensex rose 0.3 percent, its eighth day of advances, as Tata Motors Ltd. rallied 2.8 percent to a record.

Obama and Modi said they had made a breakthrough meant to spur a surge in civilian nuclear projects, while Modi also won backing from the U.S. for a $160 billion solar energy program. The U.S. leader also pledged initiatives to generate more than $4 billion of trade and investment between the two countries.

Malaysia’s ringgit and Indonesia’s rupiah appreciated 0.3 percent. Equity gauges in Vietnam, South Korea, Thailand and the Philippines climbed at least 0.4 percent.