Emerging-Market Stocks Rise, Head for Best Weekly Gain in Six on U.S. Data

Emerging-market stocks rose, with a benchmark index headed for its largest weekly gain in six weeks, after an unexpected increase in pending U.S. home sales bolstered the outlook for the world’s biggest economy.

The MSCI Emerging Markets Index climbed for a third day, adding 0.4 percent to 999.14 at 12:24 p.m. in Singapore. The gauge has gained 3 percent this week, poised for its steepest increase since July 23. Markets in India, South Korea, Thailand and the Philippines rose. Taiwan’s benchmark index climbed the most in a month, led by flat-panel makers.

“People are jumping in again,” said Pankaj Kumar, who oversees about $560 million as chief investment officer of Kurnia Insurans Malaysia Bhd. “As expectations have come off quite a bit, the numbers coming in are slightly better than those lowered expectations.”

In New York yesterday, the S&P 500 increased 0.9 percent, its biggest two-day gain since early July, after a report showed pending sales of existing U.S. houses climbed 5.2 percent in July, compared with a 1 percent drop economists had estimated in a Bloomberg survey.

Emerging-market stocks may outperform for the rest of the year as below-trend growth and low inflation in developed nations drive inflows to “healthy” developing economies, JPMorgan Chase & Co. analysts led by Adrian Mowat wrote in a report today.

While investors pulled a net $7.1 billion from equity funds globally in the week to Aug. 25, emerging-market stock and bond funds continued to post net inflows, according to Cambridge, Massachusetts-based EPFR Global. Developing-nation equity funds have attracted about $37 billion this year, following last year’s record $83 billion of inflows, according to Morgan Stanley.

Flat-Panel Makers

Chimei Innolux Corp. led flat-panel makers higher in Taipei amid speculation fourth-quarter demand for consumer electronics will improve from the previous three months, said Richard Ko, an analyst at Jih Sun Securities Co.

Chimei surged 6.6 percent to NT$35.65, set for the biggest advance since Jan. 4. Hannstar Display Corp. jumped 4.9 percent to NT$6.20. AU Optronics Corp. climbed 4.3 percent to NT$29.05. The Taiex index advanced 1.4 percent, the most since Aug. 2.

In Seoul, the Kospi rose 0.2 percent after the South Korean economy expanded at almost the same pace in the second quarter as initially estimated, fueled by demand for the nation’s exports of semiconductors and electronic products.

Thai manufacturers rose in Bangkok trading after a court yesterday ruled that most of the 76 industrial projects halted last year because of pollution and licensing concerns can be restarted, a decision that may resolve uncertainties about the nation’s investment regulations.

Thai Stocks

PTT Pcl, Thailand’s biggest energy company with the most plants being suspended, jumped 5.2 percent, the highest since July 2008. Siam Cement Pcl, the nation’s third-largest publicly traded company, climbed 5 percent, set for a record close.

Thailand’s SET Index rose for a seventh day, climbing 1.4 percent to 933.29, the highest level since November 1996. The measure has gained 3.7 percent this week, a third weekly advance.

The Philippine Stock Exchange Index jumped 1.9 percent to the highest level since Dec. 7, 2007. The benchmark index advanced 5 percent this week, the most since May 14. China’s benchmark Shanghai Composite Index fell 0.5 percent, paring a 1.3 percent weekly gain.

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

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