Hong Kong Protests, Brazil, Russia Bring Emerging Markets Lower
September 30, 2014
Equities in emerging markets are down at the start of the week.
As the dollar strengthens, here are the localized culprits:
In Hong Kong, protests fueled a nearly 2% selloff in the Hang Seng Index.
Brazil’s Bovespa Index is down about 4.5%. Equities have declined headed into Sunday’s presidential election as the reality of the latest voter polls sinks in. The latest, on Friday, showed incumbent President Dilma Rousseffis extending her lead. Investors keen on economic reforms have bid markets higher when candidate Marina Silva is gaining ground. Last week, the iShares MSCI Brazil Capped ETF (EWZ) fell 5.6%, following a 2.36% rise on Friday. Shares of mining giant Vale (VALE) are down nearly 2.6%.
“A likely Oct. 26 runoff between Rousseff and Silva is too close to call, according to Datafolha. Datafolha poll published on Sept. 26 showed Rousseff’s support rose to 40 percent for the first-round vote, up from 37 percent in the previous survey released Sept. 19. [Candidate] Marina Silva‘s first-round support fell to 27 percent from 30 percent. See “Ibovespa Futures Tumble.”
Russia’s Micex Index fell 3% and the ruble weakened. The Market Vectors Russia ETF (RSX) is down 2.5%; the fund fell 0.63% last week. Ukraine continues to negotiate with Russia over $3 billion in unpaid natural gas bills, and moved closer to a deal, The Wall Street Journal reports. Shares of Gazprom (OGZPY) are down nearly 3 points in U.S. trading.