Emerging Stocks Gain on IMF's Korean Growth Estimate, U.S. Manufacturing

Emerging-market stocks rose, sending the benchmark index higher for a second day, after the International Monetary Fund raised its growth forecast for South Korea and U.S. manufacturing grew faster than estimated.

The MSCI Emerging Markets Index climbed 0.5 percent to 995 as of 4:32 p.m. in Singapore, with two stocks rising for every one that fell. South Korea’s Kospi index added 0.6 percent and the won gained to the strongest level since Aug. 19 after the International Monetary Fund said the currency was “undervalued” and raised its economic growth forecast for the nation to 6.1 percent, from a July prediction of 5.75 percent.

The Standard & Poor’s 500 Index rallied 3 percent yesterday, the most since July 7, after the Institute for Supply Management’s factory index unexpectedly rose to 56.3 in August from 55.5 in July. U.S. stocks also gained after a report yesterday showed Chinese factory production grew at a faster pace last month.

“We remain of the view that the U.S. and global recovery will continue,” said Shane Oliver, head of investment strategy at AMP Capital Investors, which oversees about $85 billion in assets.

The Bombay Stock Exchange’s Sensitive Index and Russia’s Micex index both advanced 0.3 percent. China’s benchmark Shanghai Composite Index rose 1.3 percent, climbing for the first time in three days.

SAIC, Ping An

Guangzhou Automobile Group Co. surged 8.1 percent in Hong Kong, the biggest percentage gain on the MSCI index, after a research group said yesterday passenger-car sales grew 59 percent in August from a year earlier, more than three times July’s pace. SAIC Motor Corp., China’s biggest carmaker, jumped 8.9 percent, the biggest gain since May 2009.

Ping An Insurance (Group) Co. rose 2.7 percent in Hong Kong after a two-month suspension. China’s second-largest insurer will pay 29.1 billion yuan ($4.3 billion) for a stake that will give it control of Shenzhen Development Bank Co. and bolster its banking operations.

The Philippine Stock Exchange Index jumped 2 percent at the noon close in Manila to the highest level since Dec. 27, 2007, buoyed by accelerating economic growth and expectations the government will contain the deficit. Ayala Corp. and Alliance Global Group Inc. led the advance after the government said spending in August may be within target.

VTB Group, Russia’s second-biggest lender, rose as much as 0.8 percent. Profit attributable to shareholders reached a record 26.9 billion rubles ($876 million) in the first half, versus a loss in the year-earlier period, state-run VTB said on its website today.

--Chua Kong Ho in Shanghai, with assistance by Shiyin Chen. Editors: Reinie Booysen, Richard Frost

To contact the Bloomberg News staff on this story: Chua Kong Ho at kchua6@bloomberg.net

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