Emerging-Market Stocks Rise to 1-Week High as China Weathers Europe Crisis

Developing-nation stocks rose, sending the benchmark index to a one-week high, after China reported higher-than-estimated retail sales and the European Central bank increased its economic growth forecast.

The MSCI Emerging Markets Index gained 1.1 percent to 917.33 at 12:12 p.m. in Singapore, set for its highest level since June 3. The gauge has climbed 0.4 percent this week. Indexes in China, Taiwan, South Korea, India, Indonesia, Malaysia and the Philippines all advanced.

“No other place is safer than China in this decade,” Liu Yang, chairwoman of Atlantis Investment Management Ltd., which oversees $3 billion, said in a Bloomberg Television interview. “The U.S. has its problems. Europe is falling apart. The global imbalances are making emerging markets more attractive.”

The emerging-markets gauge has lost 7.3 percent this year on concern Europe’s debt crisis and measures to slow growth in China will hurt the global economic recovery. China’s surging retail sales and loan growth that beat economist estimates adding to evidence that the world’s third-biggest economy is withstanding Europe’s debt crisis.

Official data released yesterday in Beijing showed China’s exports jumped the most in six years and property prices rose at a near-record pace. The nation’s retail sales surged 18.7 percent in May, today’s data showed, compared with an 18.5 percent gain in April. The estimate was for 18.5 percent growth.

Gree Electric Appliances Inc. led gains for retailers, climbing 2 percent and GD Midea Holding Co. added 1.4 percent.

Chinese banks extended 639.4 billion yuan of new local- currency loans last month, the central bank said on its website.

Industrial & Commercial Bank of China Ltd., the nation’s biggest lender, gained 0.7 percent to 4.17 yuan. Bank of China Ltd., the third-largest, advanced 0.6 percent to 3.57 yuan.

Europe Crisis

China is paying close attention to the European debt crisis and its impact on the country, Sheng Laiyun, spokesman for the National Bureau of Statistics, told a briefing in Beijing today.

The ECB raised its euro-region growth forecast for this year and cut it for 2011. The central bank expects the economy will expand around 1 percent in 2010 compared with a previous forecast of about 0.8 percent. It will grow about 1.2 percent in 2011, lower than an earlier projection of around 1.5 percent because of weaker domestic demand, said Jean-Claude Trichet, head of the ECB.

India’s Bombay Stock Exchange Sensitive Index climbed 0.9 percent, its third day of gains. Reliance Industries Ltd., the most valuable company, added 1.8 percent after two people familiar with the matter said it’s considering buying a stake in shale gas assets owned by Pioneer Natural Resources Co.

Korea Gains

In South Korea, the Kospi Index advanced 0.9 percent, its highest level since May 14. Hyundai Heavy Industries Co., the world’s largest shipbuilder, led advances among South Korean shipyards on speculation they may raise prices to offset a stronger currency and higher material costs.

Thailand’s SET index gained 0.2 percent. Sri Trang Agro- Industry Pcl, the biggest publicly traded rubber producer, rose 1.1 percent to a record after rubber prices climbed.

Taiwan’s Taiex index rose 1.5 percent to 7,290.87, bound for its highest close since June 4.

To contact the reporter on this story: Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net

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