Emerging Markets

February 11, 2012 by staff 

Emerging Markets, Emerging-market stocks fell the most in more than two months as European leaders delayed a rescue package for Greece and China’s trade data signaled growth in the world’s second-largest economy is weakening.

The MSCI Emerging Markets Index dropped 1.8 percent to 1,042.15 at the close in New York, retreating from a six-month high and erasing its weekly gain. The Hang Seng China Enterprises Index sank 2.3 percent. Benchmark gauges in Hungary and the Czech Republic lost more than 2 percent. Brazil’s Bovespa fell 2.3 percent, the most this year.

Greek Prime Minister Lucas Papademos obtained approval from his Cabinet for deeper budget cuts needed to secure a second package of international aid. The approval capped a week of tension in Athens as European Union and International Monetary Fund officials argued with Greek government officials over the conditions required to secure the 130 billion-euro ($172 billion) rescue package.

“The delay has raised the level of uncertainty in the market,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila. “Some investors are worried this might not be done on time. Greece has to tighten its belt to improve its ability to service debt and reduce prospects of a default.”

The measure for developing markets has gained 14 percent in 2012, beating a 7.4 percent advance by the MSCI World Index of developed-nation shares. MSCI’s emerging-stocks gauge trades for 10.3 times estimated profit, up from an October low of about 9 times. The index has dropped 0.6 percent this week.

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