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Emerging Markets are Halfway to a Bear Market

“Emerging-market stocks retreated, sending the benchmark measure down 10 percent from this year’s peak, as disappointing Chinese data added to concern the global economy is faltering. India’s rupee slumped to a record.

PetroChina Co. (857) fell to the lowest price since 2010, while OAO Lukoil paced losses among Russian commodity stocks. Brazil’s Ibovespa extended a slump from this year’s high to 19 percent, as beef producer JBS SA slid. The rupee posted its largest drop in more than 20 months on bets the central bank will refrain from lowering borrowing costs. Mexico’s IPC index rose the most among major equity benchmarks in the Americas and Europe.

The MSCI Emerging Markets Index retreated 0.8 percent to 972.89, extending the decline from its Jan. 3 peak to 10 percent. China’s industrial production rose a less-than-forecast 9.2 percent last month, while export gains were at a 10-month low and imports dropped, data over the weekend showed. A government report on June 7 showed U.S. employers took on more workers than forecast last month.

“Investors are not seeking additional risk at this point,”Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees about $380 billion, said by phone. “The data from North Americacontinues to indicate recovery, but that’s not necessarily true for the rest of the world. The sun appears to be rising in the U.S. faster than in other geographies, and China is on the list.”

Consumer discretionary and commodity shares led losses in a measure of developing-nation stocks among 10 groups. The broad gauge extended this year’s drop to 7.8 percent, compared with a 10 percent jump in the MSCI World Index….”

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