(Bloomberg) — Emerging-market stocks retreated after the longest rally in 15 months spurred on valuations. Chinese rail shares surged on government plans to invest in new tracks, while faster-than-expected inflation in Turkey weighed on bonds.
The S&P BSE Sensex Index fell from a record after stocks on the measure in Mumbai traded at their most-expensive level in five months. Yields on Turkey’s two-year notes jumped the most since March 10 and the lira lost 0.6 percent versus the dollar after the inflation rate rose to an eight-month high in March.
Egypt’s EGX 30 Index slid the most in the world after a blast outside Cairo University Wednesday spurred security concerns. China Railway Group Ltd. rose 5.1 percent in Hong Kong.
The MSCI Emerging Markets Index, which rallied 6.8 percent in the previous nine days, lost 0.4 percent to 1,001.45 at 1:45 p.m. in London. China outlined a package of measures including tax relief to support the economy and create jobs after a slowdown endangered Premier Li Keqiang’s target of 7.5 percent growth this year.
“Valuations of some emerging stocks may be a little bit stretched and subject to some correction after their strong rallies,” Komsorn Prakobphol, an investment strategist at Tisco Financial Group Pcl, said by phone in Bangkok. “China’s new stimulus package provides investors with more catalysts to raise investments in Chinese stocks.”
The emerging-nation gauge traded at 10.5 times projected 12-month earnings yesterday, the highest in three months, according to data compiled by Bloomberg. The multiple for the MSCI World Index of developed-country equities was 14.9.
A Bloomberg gauge tracking 20 emerging-market currencies decreased for a second day after reaching a three-month high on April 1. The premium investors demand to own developing-nation debt over U.S. Treasuries increased two basis points to 290, according to indexes compiled by JPMorgan Chase & Co.
The Sensex retreated for the first time in seven days, losing 0.2 percent as State Bank of India fell 2 percent. The gauge advanced 2.3 percent in the previous six days as international investors extended Asia’s largest equity inflows.
MOL Nyrt. rose 2.3 percent to a three-week high in Budapest. The refiner’s board proposed a 60 billion forint ($268 million) dividend after 2013 earnings, including a 13 billion-forint special payout, according to a statement late yesterday. Turkish inflation
Poland’s WIG30 index fell for the first time in eight days. Russian stocks lost 0.5 percent, declining for a second day. The ruble lost 0.3 percent versus the dollar, while currencies in Brazil, South Africa and Turkey weakened at least 0.5 percent.