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Most emerging stocks decline before oil talks

Singapore - Most emerging-market stocks fell, led by financial and energy companies, as investors awaited a meeting of major oil producers seeking an output deal. Malaysia’s ringgit declined.

A gauge of Chinese mainland shares traded in Hong Kong led losses as equity indexes in Indonesia and South Korea retreated. The ringgit dropped toward a three-month low as crude oil below $45 a barrel weighed on the outlook for the net oil exporter’s finances.

The rand halted a two-day advance. Financial markets were shut for a second day in Taipei after a typhoon that left four dead in Taiwan and knocked out power to millions.

While the first of three US presidential debates set off a rally among developing-nation assets on Tuesday, the euphoria faded Wednesday as attention shifted to oil prices amid speculation the OPEC talks in Algiers will do little to stem a global oversupply.

Saudi Arabia signaled it may compromise with Iran on a future output agreement as both countries expect no deal at the meeting. Goldman Sachs cut its oil-price forecast to $43 a barrel for the fourth quarter on a worsening glut.

“There is no clear direction for the markets in the short term,” said Ang Kok Heng, chief investment officer at Kuala Lumpur-based Phillip Capital Management, which overseas about $580m.

Oil has swung near $45 since last week amid speculation over whether the Organisation of Petroleum Exporting Countries will agree on ways to stabilize the market. Freezing output was first proposed in February, but a meeting in April ended with no final accord. OPEC’s next formal meeting is in November in Vienna.

The MSCI Emerging Markets Index was little changed as of 08:35.

The regional stock gauge has gained 9.2% in the three months ending September 30, set for its steepest quarterly gain since March 2012. It is valued at 12.5 times the projected 12-month earnings of its members. That compares with a multiple of 16 for the MSCI World Index of developed-nation stocks, which gained 3.9% during the same period.

Four out of 11 i ndustry groups in the developing-markets stock measure dropped. Ping An Insurance led a 0.9% drop in the Hang Seng China Enterprises Index, which lost 0.9%, set to pare the biggest quarterly advance since December 2014. Cnooc and PetroChina lost at least 1% in Hong Kong.

China’s Shanghai Composite Index sank 0.3%, while equity gauges in Indonesia and South Korea fell 0.5%. Shares in the Philippines, India and Malaysia climbed at least 0.1%.

Currencies, bonds

The MSCI Emerging Markets Currency Index advanced 0.1% for its second day of increases. The measure is on track for a third quarterly rally. Indonesia’s rupiah and South Korea’s won appreciated 0.2% on Wednesday.

“It’s a carry-through from yesterday’s risk-taking. There’s no major data and no Fedspeak so markets are just continuing with the same theme as yesterday,” said Sook Mei Leong, Southeast Asian head of global markets research at Bank of Tokyo-Mitsubishi UFJ in Singapore. “The momentum will not be as strong as there are no major drivers.”

The ringgit weakened 0.3 %, while the rand, Mexico’s peso and Turkey’s lira slipped 0.1%.

South Korea’s 10-year bond yield had the biggest drop in Asia, declining 3.4 basis points to a three-week low of 1.46%. Rates of similar-maturity bonds in Indonesia and India increased one basis point, while that of Malaysia’s slipped one basis point.

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