Emerging-Market Stocks Advance as Commodities Rise, Fed Sigals Low Rates

Emerging-market stocks climbed for an eighth day and government borrowing costs fell as concern eased that the global economy is slowing, and rising commodities boosted the profit outlook for producers.

The MSCI Emerging Markets Index advanced 0.3 percent to 993.84 by 5 p.m. in New York, extending the longest stretch of gains in five weeks. The extra yield on developing-nation debt over U.S. Treasuries dropped two basis points to 2.80 percentage points, according to JPMorgan Chase & Co.’s EMBI+ Index.

Europe’s confidence in its economy rose to the highest in more than two years in July, German unemployment declined for a 13th month and U.S. initial jobless claims fell last week, reports today showed. Brazil’s central bank said the economy is growing at a “sustainable” level as inflation slows. Energy shares led gains in the MSCI index on a rally in oil and earnings from Exxon Mobil Corp. that topped analysts’ estimates.

“Not only are companies reporting better profit figures on the back of cost-cutting, but also increased revenue,” said Manoj Ladwa, a senior trader at Monecor London Ltd. “We’re looking at developing economies” to lead growth, he said.

Brazil’s Bovespa index climbed 0.2 percent, rising for a ninth day in the longest winning streak since August 2003.

Natura Cosmeticos SA, Brazil’s biggest cosmetics maker, rose to a record after Banco BTG Pactual SA raised its share- price forecast.

China’s Shanghai Composite Index gained 0.6 percent as cement makers rallied on an increased recommendation from Citic Securities Co. India’s Bombay Stock Exchange Sensitive Index increased 0.2 percent, while benchmark indexes in Indonesia and Turkey climbed to record highs.

Ukraine IMF Loan

The Ukrainian Equities Index jumped 3.5 percent, heading for the biggest gain in three weeks. The International Monetary Fund approved a $15.2 billion loan to the country, which raised natural gas prices and agreed to trim its budget deficit to qualify for the funds.

The Czech koruna, this month’s best-performing developing- nation currency against the euro, fell from the strongest level in more than 20 months. The koruna weakened 0.4 percent on speculation the central bank may try to slow the currency’s advance to protect exports.

To contact the reporter on this story: Michael Patterson in London at mpatterson10@bloomberg.net.

• Tweet
• More
  • Business Exchange
  • Buzz up!
  • Digg
• Print
• Email