Emerging-Market Stocks Rise Most in 11 Weeks on China Output, U.S. Jobs

Emerging-market stocks rose, with the benchmark index headed for its biggest gain in 11 weeks, after faster China manufacturing growth and rising U.S. consumer sentiment bolstered confidence in the global recovery.

The MSCI Emerging Markets Index climbed 2 percent to 1,097.6 as of 10:28 a.m., its first gain in four days. The gauge was poised for its steepest rally since Sept. 13 Indonesia’s Jakarta Composite index jumped 2.5 percent, the most since Sept. 15, while benchmark gauges for Hungary, the Czech Republic, and Russia advanced at least 2 percent. Stocks in India, South Korea and Taiwan gained at least 1 percent.

“The manufacturing numbers in China came out stronger than expected, things are actually not as bad as people believe it to be,” said Choo Swee Kee, who manages about $222 million as chief investment officer of TA Investment Management Bhd. in Kuala Lumpur. “The U.S. is also coming along fine.”

China’s manufacturing grew at a faster pace for a fourth straight month, indicating the economy can withstand higher interest rates as price pressures escalate, according to the Purchasing Managers’ Index for November.

The Institute for Supply Management’s factory index showed manufacturing in the U.S. expanded for a 16th consecutive month in November. ADP Employer Services said companies added 93,000 jobs in November, more than economists had forecast.

The MSCI Emerging Markets gauge lost 2.7 percent in November, the biggest monthly retreat since May amid speculation China will increase interest rates and that Europe’s debt crisis will spread.

China, India Stocks

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, added 0.1 percent. Huaneng Power International Inc., China’s biggest electricity producer, gained 2.8 percent after saying it won approval for a non-public issue of 1.5 billion A shares.

India’s Bombay Stock Exchange Sensitive Index gained 1.7 percent, the most since Nov. 22. Suzlon Energy Ltd., India’s largest maker of wind turbines, surged 8 percent after its German unit won a supply contract in the U.K., while JSW Steel Ltd., the third-largest producer of the alloy, gained 7 percent after it was raised to “buy” from “neutral” at Nomura Holdings Inc.

First Financial Holding Co. surged 6.9 percent, leading banking stocks higher in Taipei, after the Commercial Times reported that local banks made a record pretax profit in the first ten months of 2010. The Taiex Index gained 1.8 percent.

Bovespa, Baht

Brazil’s Bovespa stock index rose 1.8 percent, snapping a four-day decline. State oil producer Petroleo Brasileiro SA gained the most in a week as crude climbed. Usinas Siderurgicas de Minas Gerais SA, Brazil’s second-biggest steelmaker, headed to the largest jump in three weeks after a report said Brazil car sales may reach the second-highest level on record in November.

Thailand’s baht gained 0.5 percent to 30.05 per dollar, the biggest rally in six weeks, while onshore interest-rate swaps climbed to a three-week high after the central bank unexpectedly raised interest rates.

Policy makers increased the one-day bond repurchase rate by a quarter of a percentage point to 2 percent, a decision that was predicted by only five of 17 economists surveyed by Bloomberg. The Bank of Thailand left borrowing costs unchanged at the previous meeting in October after lifting rates twice this year previously.

Currencies elsewhere also gained, with the South Korean won strengthening by 0.7 percent against the dollar.

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

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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