“Emerging-market stocks sank to a four-month low, sending the MSCI BRIC Index (MXBRIC)down 10 percent from this year’s peak as bird flu concerns sparked a slump in Chinese airlines and capital outflows from South Korea accelerated.
China Southern Airlines Co. (1055) fell 8.5 percent in Hong Kong on concern the widening bird flu infections may curb travel. Hyundai Motor Co. (005380), which competes with Japan’sToyota Motor (7203) Corp. selling cars abroad, slid to a 17-month low in Seoul as the yen traded near its weakest level since August 2009. Foreign funds unloaded a net $1.2 billion of Kospi index (KOSPI) shares this week, stock exchange data show, as the risk of conflict with North Korea spurred outflows. OAO MegaFon fell by a record in Moscow after JP Morgan Chase & Co. cut the stock’s rating.
The MSCI Emerging Markets Index slipped 1 percent to 1,006.88 at 5 p.m. in Hong Kong, its fifth day of declines. The gauge has dropped 2.7 percent this week. The MSCI BRIC Index retreated 10 percent from its Feb. 1 high, heading for the threshold that some investors identify as a correction. Six people have died from a new strain of bird flu in China. North Korea said yesterday it passed a law authorizing “counter- actions” against U.S. aggression including a nuclear strike. Data today may show U.S. payrolls growth slowed after weekly jobless claims rose.
“Global funds are skeptical in investing in the emerging markets amid the political and health concerns,” Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance Co. in Mumbai, said in a phone interview today. “Markets will start factoring in the fundamentals once the current headwinds disappear.”
