Hong Kong - Emerging-market stocks fell for a second day as a slump in precious metals weighed on gold producers and technology companies retreated. The lira slid the most this month on concern coalition talks will fail.
As gold plunged to a 2010 trough, Zijin Mining Group lost 6.3 percent in Hong Kong and AngloGold Ashanti sank toward a 2000 low in Johannesburg. A gauge of technology firms declined for the first time in four days.
Russian five-year bonds extended the longest stretch of gains on record, while OAO AK Bars Bank started investor meetings for what may be the nation’s biggest Eurobond sale since November. The lira fell 1.3 percent versus the dollar as South Africa’s rand retreated.
The MSCI Emerging Markets Index slid 0.6 percent to 936.20 by 11:23 a.m. in London. Gold has fallen out of favor as the Federal Reserve moves closer to raising interest rates for the first time since 2006, also denting appetite for riskier assets. Capital outflows from developing nations reached $120 billion last quarter, the most since 2009, according to JPMorgan Chase & Co.
The gold selloff “is affecting both investor sentiment towards miners and companies profitability,” Michael Wang, a London-based strategist at Amiya Capital, said by e-mail. The weakness in the lira “has to do with the very limited progress on the coalition talks, they seem to have stalled,” he said.
A Bloomberg gauge of commodity prices sank for a fifth day. Declines in gold accelerated after China said at the end of last week that it boosted bullion assets to about 1 658 metric tons, less than brokers at GoldCore and Sharps Pixley had expected.
Gold Miners
Zijin Mining fell for the first time in three days, while AngloGold and Gold Fields Ltd. dropped at least 5 percent. Bullion for immediate delivery tumbled as much as 4.2 percent, the lowest price since March 2010. The rand halted a two-day gain.
A gauge tracking 20 emerging-market currencies decreased 0.2 percent to the lowest level since March. The lira led declines as all but five of 24 peers retreated.
Prime Minister Ahmet Davutoglu told his party’s provincial chiefs that while efforts to form a coalition government will continue to the very last minute, they should “be on alert, as if we’d go for an election any day,” Hurriyet newspaper reported, citing state-run Anadolu Agency’s sources at the prime minister’s office.
Russian Eurobond
Yields on five-year Russian notes fell two basis points to 10.47 percent, the lowest since November. The premium investors demand to own emerging-market bonds over US. Treasuries narrowed three basis points to 346, according to JPMorgan indexes.
AK Bars, which is based in Russia’s central region of Tatarstan, is looking to raise as much as $400 million of bonds with a maturity of up to three years and interest rates not exceeding 8.5 percent, according to a regulatory filing.
All 10 industry groups in the emerging-markets index fell, led by technology and materials shares. Samsung Electronics retreated 2.3 percent in Seoul. Semirara Mining & Power plunged 14 percent in Manila after a coal-mine accident.
The Shanghai Composite Index rose 0.9 percent as small companies rallied and the benchmark gauge posted the smallest price swings since a market rout began. Hong Kong’s Hang Seng China Enterprises Index declined 0.6 percent.
Outflows in the second quarter marked a reversal from the previous three months when emerging markets had $80 billion of inflows, analysts led by Nikolaos Panigirtzoglou wrote in a note Friday. Higher US rates “should further strengthen the dollar and prompt more fund outflows from commodity, metals and emerging-market assets,” Vattana Vongseenin, the CEO of Phillip Asset Management in Bangkok, said by phone.
Bloomberg