Emerging-market shares halted a five-day gain as a slide in oil prices sapped demand for higher-yielding assets.
A gauge of developing-nation shares dropped from the highest level in a year, led by losses in Taiwan and South Korea. Malaysia’s ringgit weakened the most among emerging-nation currencies as the country derives 20 percent of its revenue from energy-related sources. The South Korean won slumped as the central bank governor said there was still room to adjust policy after keeping interest rates on hold.
“Renewed worries about the oil-price drop should weigh significantly on developing countries’ assets as most of their economies depend on energy and commodity exports for recovery,” said Komsorn Prakobphol, a senior investment strategist in Bangkok at Tisco Financial Group Pcl, whose mutual-fund unit manages about $5 billion. “We advise investors to take some profit on their equity holdings. Valuations are too high and it’s a good opportunity to lock in some profit.”
The MSCI Emerging Markets Index of shares fell 0.3 percent as of 11:06 a.m. in Hong Kong after rising 4 percent during the previous five days. The gauge closed Wednesday at the highest level since July 24, 2015.
The MSCI Emerging Markets Currency Index was little changed, having gained 1.7 percent this month. The ringgit dropped for the first time in three days, losing 0.4 percent.
The won weakened after the Bank of Korea held its key rate at a record-low 1.25 percent and Governor Lee Ju Yeol said the central bank still had room to adjust policy. The currency dropped 0.4 percent.
Brent crude fell 0.7 percent after sliding 2.1 percent on Wednesday when U.S. stockpiles unexpectedly expanded.
By: Anuchit Nguyen (Bloomberg News).
Photo: Business Times, Singapore.
Review: Emerging Market Formulations & Research Unit, FLAGSHIP RECORDS.
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