Emerging Markets Erase Gains as Commodities Get Liquidated

“Emerging-market stocks erased earlier gains as lower commodity prices dragged down Russian and Polish equities.

KGHM (KGH) Polska Miedz SA tumbled 6 percent in Warsaw after copper retreated, helping send Poland’s WIG20 Index (WIG20) to a seven- month low. OAO Gazprom, Russia’s biggest natural-gas producer and the parent of crude producer OAO Gazprom Neft, slid to the lowest level since March 2009 in Moscow, dragging the Micex Index (INDEXCF) toward its lowest close since June 25. Chinese banks led a 1.2 percent drop in the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong.

The MSCI Emerging Markets Index (MXEF) fell 0.3 percent to 1,006.41 as of 12:39 p.m. in London. The gauge earlier gained as much as 0.4 percent. Copper led declines in industrial metals after the International Monetary Fund cut its forecast to China’s economic growth yesterday, while oil traded near the lowest level in four months. The rand weakened 0.5 percent versus the dollar and South African bonds gained, as March inflation was slower than predicted by analysts.

“Russia is down on commodity prices, central and eastern Europe on weak Europe,” Martial Godet, head of emerging-markets strategy at BNP Paribas SA in London, said by e-mail. “Only the markets with low commodity exposure and strong domestic stories like India, ASEAN,Turkey, are somewhat immune.”…”

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