Emerging markets slipped on Tuesday after weaker Chinese import data hinted at an economic slowdown in the world’s second-largest economy and Brazil, in political turmoil, was threatened with a credit ratings downgrade.
MSCI’s benchmark emerging market stocks index eased 0.2 per cent after two days of gains, and major emerging currencies such as the Turkish lira and South African rand weakened against the dollar.
Stocks in the UAE fell likewise.
The Abu Dhabi Securities Market Index fell 0.1 per cent, its fourth down session in a row. It was led down by Aldar Properties and Union National Bank.
The Dubai Financial Market General Index fell 0.8 per cent to more than give back its gains from the week. Its key losers were Emaar Properties and Dubai Islamic Bank.
The day’s key piece of news for emerging markets was that Chinese imports of refined copper, which tend to be a barometer of industrial demand, were down 41 per cent in April versus a year ago. This continues a run of lacklustre data from China.
“One thing we are keeping an eye on is what’s happening in China where the recovery seems to have peaked. We expect the slower data to continue in coming quarters and that could have repercussions on emerging markets as a whole,” said William Jackson, a senior emerging markets economist at Capital Economics.
Chinese bourses were subdued but Hong Kong stocks rose to 22-month highs in moves attributed to flows from Chinese mainland investors.
* Bloomberg
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