Emerging market stocks fall for third day

09:39, July 20, 2010      

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Emerging-market stocks fell for a third day as Bank of America Corp, Citigroup Inc and General Electric Co posted worse-than-estimated sales, fueling concern the global economic recovery will falter.

The MSCI Emerging Markets Index slipped 0.8 percent to 941.44 as of 3:08 pm in Singapore, adding to a two-day, 1.3 percent retreat. Currencies also weakened, led by the South Korean won and Malaysia's ringgit.

Samsung Electronics Co and Hon Hai Precision Industry Co led declines among exporters. The won slumped 1 percent against the dollar while the ringgit weakened for a third day.

China's stocks jumped, lifting the benchmark Shanghai Composite Index by the most in a week, on speculation the government may increase investment in low-income housing and boost domestic consumption.

"We might see a double dip in the United States and Europe," Ka Chung Law, chief economist and strategist at the Hong Kong branch of Bank of Communications Ltd, said in a Bloomberg Television interview.

Investors should buy gold, yen or US Treasuries instead of stocks as "bear sentiment sets in", he said.

Russia's Micex index fell 0.2 percent, tracking a fourth day of declines in crude oil prices. The Bombay Stock Exchange's Sensitive Index also retreated 0.2 percent, paced by Infosys Technologies Ltd after the stock was downgraded by First Global.

US housing report

Stocks fell in the US after the Reuters/University of Michigan preliminary index of consumer sentiment decreased to its lowest level since August 2009, sliding to 66.5 from 76 in June. Bank of America, GE and Citigroup plunged at least 4.6 percent on July 16.

The US housing market probably took another step back in June after builders began work on 580,000 houses last month at an annual rate, down 2.2 percent from May and the slowest pace this year, according to the median estimate of 61 economists surveyed by Bloomberg News before Commerce Department data due on Tuesday.

Other reports may show sales of existing homes fell for a second month and the index of leading indicators declined for the first time in more than a year.

Samsung, Asia's largest maker of semiconductors, flat screens and mobile phones, declined 0.9 percent. Hon Hai, whose customers include Apple Inc, dropped 1.2 percent.

The won slumped 1 percent to 1,215.65 per dollar in Seoul, the biggest decline this month, according to data compiled by Bloomberg. The ringgit weakened for a third day, sliding 0.6 percent to 3.2280.

The Shanghai Composite jumped 2.1 percent, its largest gain since July 9. Poly Real Estate Group Co and China Merchants Property Development Co rose at least 2.9 percent after Citic Securities Co. said local governments will build more public housing to boost investment.

"Expectations that the government will boost domestic demand have spurred optimism that earnings at these companies will bottom out," said Wang Zheng, a senior fund manager at Jingxi Investment Management Co in Shanghai.

Source:China Daily

(Editor:黄蓓蓓)

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