Emerging Stocks Rise, Pare Worst Monthly Drop in a Year, on Aid for Greece
Emerging-markets stocks rose for a fourth day, paring the benchmark index’s biggest monthly drop in a year, on speculation European nations will pledge additional aid to ease Greece’s financial crisis.
The MSCI Emerging Markets Index climbed 1.7 percent to 1,167.97 at 4 p.m. in New York. The gauge slipped 3 percent this month, its steepest slide since May 2010. South Korea’s Kospi Index (KOSPI) increased 2.3 percent. Turkey’s ISE National 100 index (XU100) advanced 2.5 percent after the nation’s April trade deficit was less than forecast. Brazil’s Bovespa index rose 1 percent as traders pared bets for higher borrowing costs after the nation’s industrial production unexpectedly fell.
Information technology and health care led the index higher, with exporters such as Samsung Electronics Co., Asia’s biggest maker of chips, flat screens and mobile phones, and Hynix Semiconductor Inc. advancing. European Union leaders will decide on a new aid package for Greece by the end of next month, said Luxembourg’s Jean-Claude Juncker, who leads the group of euro-area finance ministers.
“Some investors believe the Greece problem can be resolved with an amicable arrangement,” said Scott Lim, who oversees the equivalent of $670 million as chief executive officer of Kuala Lumpur-based MIDF Amanah Asset Management Bhd. Still, “the problem isn’t going to go away so soon,” he said.
Greek Prime Minister George Papandreou said on May 27 he’ll press ahead with new austerity measures after failing to win backing from the main opposition parties.
The MSCI gauge of emerging markets has risen 1.4 percent this year, trailing a 5.8 percent advance in the MSCI World Index, a measure for developed markets. Stocks in the benchmark index for developing nations are valued at about 11.3 times estimated earnings, less than the multiple of about 13 times for developed countries.
Poland’s WIG20 Index advanced for a sixth day, the longest winning streak since April, adding 1.1 percent. The zloty strengthened 1.5 percent after gross domestic product expanded an annual 4.4 percent, in line with the median estimate of 26 economists surveyed by Bloomberg.
KGHM Polska Miedz SA (KGH), the copper producer with the biggest European mine output, gained 2 percent. PKN Orlen SA, Poland’s biggest oil company, increased for a sixth day, adding 2.3 percent.
Oil rose for a second day, adding 2.1 percent to settle at $102.70 a barrel in New York after a pump-station leak forced the shutdown of the Keystone pipeline that carries crude to the largest U.S. storage hub.
Russia’s Micex Index (INDEXCF) of 30 stocks gained for a third day, adding 1.3 percent to 1,666.30. OAO Lukoil, Russia’s second- largest oil producer, leaped 3.8 percent, the most since Feb. 1. OAO Novatek, the nation’s second-largest gas producer, rose 2.9 percent.
Homebuilder PDG Realty SA Empreendimentos & Participacoes, climbed 4 percent, leading advances by Brazilian companies that depend on credit growth.
South African economic growth unexpectedly accelerated to the fastest pace in a year in the first quarter as the lowest interest rates in three decades spurred manufacturers to restock to meet rising demand. Gross domestic product rose an annualized 4.8 percent from a revised 4.5 percent in the final quarter of 2010, Statistics South Africa said in a report in Pretoria today. The median estimate of 18 economists surveyed by Bloomberg was for growth to slow to 4.2 percent.
South Africa’s FTSE/JSE All Share Index rose for a sixth session, adding 0.5 percent as commodity prices rose.
The Standard & Poor’s GSCI Index of 24 raw materials climbed 1.2 percent, reaching its highest closing level in three weeks. The index dropped 6.8 percent this month, the worst performance since May 2010.
Samsung Electronics, which derived 20 percent of its revenue from Europe last year, according to data compiled by Bloomberg, climbed 2 percent in Seoul trading. Hynix Semiconductor Inc. (000660), the world’s second-largest computer-memory chipmaker, advanced 2 percent. Hyundai Heavy Industries Co., the world’s biggest shipbuilder, surged 11 percent after it received an order for two liquefied natural gas carriers from Dynagas Ltd. of Greece. Taewoong Co., the South Korean maker of parts for wind power plants, rose 8.3 percent after Germany proposed to double renewable energy output by 2020.
China’s Shanghai Composite Index rose 1.4 percent, ending the longest losing streak for the benchmark index since December 2008.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries narrowed six basis points, or 0.06 percentage point, to 309 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.
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