Emerging market stocks slip, continuing losing streak

New York: Emerging-market stocks fell, posting their longest weekly losing streak in 10 months, as technology company earnings missed estimates and concern Greece may fail to repay debt curbed demand for higher-yielding assets.

The MSCI Emerging Markets Index of 22 developing countries slipped 0.7 per cent to 933.59 by 5pm in New York, leaving it down 3.1 per cent in the past five days.

The third straight weekly decline marks the gauge's longest such stretch since March.

The measure pared some of its losses after the US government said the economy grew at the fastest pace in six years.

Recovery fears

Emerging-market equity funds posted the first net outflows in 12 weeks on concern the global economic recovery will slow, losing $608.5 million (Dh2,235 trillion) in the week ended January 27, research company EPFR Global said.

Greek bonds and credit-default swaps show investors are starting to doubt that the nation can reduce the largest budget deficit in the European Union without help from outside.

"Ongoing tensions in Greece alongside shaky US and Asian equity market backdrops" has created "uneasy" trading in emerging markets, Gyula Toth, a Vienna-based strategist at UniCredit SpA, wrote today in a research note.

SanDisk Corporation, the biggest maker of flash-memory cards for digital cameras and mobile phones, slid 12 per cent after its sales forecast trailed some estimates.

AU Optronics Corporation, Taiwan's largest liquid-crystal-display maker, fell by the most in almost 11 months after posting an unexpected fourth- quarter net loss of $245 million, compared with expectations for a $105.9 billion profit.

The MSCI EM Information Technology Index fell for the second week, losing 1.6 per cent today and 4 per cent this week. Elpida Memory Incorporated, Japan's biggest computer-memory maker, also missed analysts' projections.

Greek Bonds

The extra yield investors demand to own emerging-market dollar bonds instead of US Treasuries widened five basis points to 3.09 percentage points, according to JPMorgan Chase & Company's EMBI+ Index.

Greece's government bonds are the world's worst performers in January on concern the country won't be able to raise $72 billion this year to reduce a budget deficit of almost 13 per cent of gross domestic product. The region's policy makers have no "plan B" to help reduce its debt, EU Monetary Affairs Commissioner Joaquin Almunia said today.

The nation's debt lost 6 per cent in local currency terms in January, extending the decline over the past three months to 10 per cent, Bloomberg/EFFAS indexes show.

The emerging-market index pared losses of as much as 1.3 per cent after the Commerce Department in the US said the economy expanded at a 5.7 per cent pace in the fourth quarter.