| Monday, January 08, 2007 |
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Emerging-Market stocks had their worst week in almost six months on falling commodity prices and US economic reports that fuelled concern that global economic growth will slow.
Petroleo Brasileiro SA, Brazil’s state-controlled oil company, led the drop, falling 7.2% for the week, as crude oil had its biggest weekly decline since April 2005. An index of contracts to buy existing homes in the US fell this week, fuelling concerns that global demand for building materials is slowing. The Morgan Stanley Capital International Emerging Markets Index, which tracks 25 developing markets, fell 2.1% this week, the most since the week ended July 14 and its first loss in 15 weeks. The measure jumped 29% last year.
“A slowing US housing market, and indications that the Federal Reserve will cut rates later rather than sooner, came as a negative surprise to a market that had a very strong run,” said Dimitri Chatzoudis, who manages about $1 billion in emerging-market shares at ABN Amro Holding NV in Amsterdam. “Commodity stocks are the most exposed to signs of an economic slowdown.”
Crude oil fell 7.8% this week, the steepest weekly decline in New York since April 2005, as warm US weather reduced heating demand. Copper prices in New York had the biggest weekly decline in a decade as slower US economic growth reduced demand for metals used in homes, appliances and cars.
South Africa’s Sasol, the world’s biggest producer of motor fuel from coal and PetroChina, the nation’s biggest oil company, fell morethan 5%.
An index of signed purchase agreements to buy previously owned homes fell 0.5% in November, a third consecutive decline, to 107 from 107.5 in October, the National Association of Realtors said on Thursday.
This week’s minutes from the Fed’s December 12 meeting said the “predominant concern” is rising prices and the risk of a slowdown is more than anticipated. Southern Copper, the world’s second-largest mining company by reserves, lost 6.5% this week in Peru. Indexes in China, Thailand, Poland, Turkey, Hungary, Mexico, Colombia and Peru fell more than 1%.
Global stockpiles of copper are at the highest level since June 2004. The US economy grew at the slowest pace of 2006 in the third quarter, led by a decline in homebuilding quarter. Builders are the biggest consumers of copper. Prices tumbled 12% this week, touching a nine-month low.
Copper futures for March delivery dropped 6.7 cents, or 2.6%, to $2.535 a pound on the Comex division of the New York Mercantile Exchange. Crude oil for February delivery rose for the first day in three, up 72 cents, or 1.3%, to $56.31 a barrel on the New York Mercantile Exchange.
Petrobras fell for a third day, down 1.46 reais, or 3.1%, to 46.19. The stock rose 34% last year. Mol Nyrt, Hungary’s largest oil company, slid 2.5% to 20,275, extending its weekly retreat to 6.1%.
PTT Exploration, the nation’s second-largest natural gas producer, fell 1.6% to 93 baht. Shares of the two companies accounted for about 20 percent of the decline in the benchmark SET Index, which sank 3.1%. |
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