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Emerging stocks drop from 14-month high on payrolls report

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(Bloomberg) — Emerging-market stocks fell from a 14-month high after the U.S. jobless rate slid to an almost six-year low, bolstering the case for the Federal Reserve to rein in stimulus measures. South Africa’s rand led currencies lower.

The MSCI Emerging Markets Index lost 0.2 percent to 1,058.78 by 2:42 p.m. in London, after closing yesterday at its highest since May 9, 2013. The rand weakened 0.5 percent against the dollar. U.S. employers added more workers than forecast in June and the unemployment rate dropped to 6.1 percent, Labor Department figures showed.

“The growth in payroll employment was stronger than expected,” Michael Wang, an emerging-market strategist in London at Amiya Capital LLP, said by e-mail. “As a result, the U.S. dollar has strengthened against EM currencies, which is dragging down EM equities.”

The iShares Emerging Markets exchange-traded fund fell for the first time in three days, dropping 0.1 percent.

The WIG30 Index in Warsaw slumped 1 percent, falling for a third day. PGE SA, Poland’s largest power utility, slid to the lowest level since May 12, extending yesterday’s 6.6 percent drop, after the nation completed the sale of a stake for 1.32 billion zloty ($434 million).

Turkey Slips

The Borsa Istanbul 100 Index dropped less than 0.1 percent, declining for a third day, and the lira weakened 0.3 percent versus the dollar. Consumer prices climbed at an annualized 9.16 percent in June from 9.66 percent a month earlier, the state statistics bureau said today. That compares with a median estimate of 8.8 percent in a Bloomberg survey of 16 economists.

The Dubai Financial Market General Index increased 0.2 percent, taking its three-day advance to 12 percent. Arabtec Holding Co. jumped 6.3 percent after its second-biggest shareholder, Aabar Investments PJSC, said it may increase its stake in the company that helped build the tallest tower in the world.

Egypt’s EGX 30 Index added 1.4 percent, the biggest gainer among Africa and Middle East markets.

The Shanghai Composite Index added 0.2 percent to a two- week high, rising for a fourth day, while the Hang Seng China Enterprises Index climbed 0.1 percent. Anhui Conch gained the most in three months in Hong Kong.

Philippine Gains

The HSBC-Markit index of China’s services industry rose to 53.1 in June, the highest since March 2013, a report showed. Readings of more than 50 indicate expansion. Separate data showed the official non-manufacturing gauge slid to 55 in June from 55.5 the month before.

The Philippine Stock Exchange Index gained 0.7 percent, while Taiwan’s Taiex Index rose 0.4 percent.

–With assistance from Taylan Bilgic and Selcuk Gokoluk in Istanbul, Piotr Bujnicki in Warsaw and Krystof Chamonikolas in Prague.