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Emerging-Market Stocks Rise Most in a Month on China Manufacturing Growth
Emerging-market stocks rose the most in a month after the U.S. and China reported faster-than- estimated manufacturing growth.
The MSCI Emerging Markets Index rallied 1.9 percent, the most since Aug. 2, to 988.70 at 11:33 a.m. New York time. India’s Sensex added 1.3 percent, and Russia’s 30-stock Micex rose 1.9 percent, buoyed by an increase in the price of oil.
China’s Purchasing Managers’ Index rose to 51.7 in August, beating the 51.5 median estimate in a Bloomberg survey. In the U.S., the Institute for Supply Management’s gauge of manufacturing unexpectedly rose to 56.3 in August, from 55.5 a month earlier. A reading higher than 50 shows an expansion.
The Chinese manufacturing “number is good” said Zhao Zifeng, who helps oversee about $10.2 billion at China International Fund Management Co. in Shanghai. “It looks like the government has initially struck a balance between growth and tightening for the economy.”
The difference between the return investors demand to own emerging market government bonds over U.S. Treasuries narrowed 23 basis points to 280, according to JPMorgan Chase & Co.’s EMBI+ Index.
Brazilian stocks gained for a second day as raw-material producers Vale SA and Fibria Celulose SA rose on higher commodity prices. The Bovespa index increased 2.8 percent to 66,982.58.
Oil rose 2.9 percent in New York to $74 a barrel.
Emerging market currencies rose against the dollar, led by the Hungarian forint and the Polish zloty, as the manufacturing data boosted demand for higher-yielding assets. The South African rand gained the most since July 26 against the dollar after South African manufacturing improved for the first time in three months.
To contact the reporters on this story: Jason Webb at jwebb25@bloomberg.net; Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net
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