Emerging-market stocks surged, gaining for a fourth day as a pickup in manufacturing output boosted optimism the global economy is weathering Europe’s debt crisis.
The MSCI Emerging Markets Index (MXEF) surged 2.5 percent to 939.91 at the close in New York, the highest since Dec. 8 and the biggest gain in a month. The Bovespa index increased 2.5 percent in Sao Paulo. The Hang Seng China Enterprises Index (HSCEI) of Chinese stocks traded in Hong Kong jumped 3 percent, the sharpest advance in a month. Benchmark measures surged at least 2 percent in South Korea, Turkey, India and Russia.
Manufacturing expanded in the U.S., China and India, showing the resilience of the global economy. Purchasing manager indexes for the U.K., Switzerland, China, India and Australia rose in December, while German unemployment fell more than economists forecast as exports of cars and machinery boomed, reports today showed. U.S. manufacturing growth accelerated more than economists’ predictions to the fastest pace in six months.
“China and India manufacturing indicators have topped consensus and led to modest but broad gains across most markets and commodities this morning,” Chris Weafer, chief strategist at Troika Dialog in Moscow, said in an e-mailed comment. “The best one can say about markets coming into 2012 is expectations are so low that any surprisingly good news, or even less bad than currently feared, could have an immediately positive impact on asset prices.”
A report this week will probably indicate that hiring in the U.S. accelerated in December, a sign that the country’s improving labor market will bolster consumer spending in early 2012. Payrolls climbed by 150,000 workers after rising 120,000 in November, according to the median forecast of 75 economists in a Bloomberg News survey before the Labor Department release on Jan. 6.
Crude oil surged 4.2 percent to the highest level in more than seven months in New York as concern persisted that sanctions against Iran may lead to supply disruption. The Standard & Poor’s GSCI index of commodities rose 3.4 percent.
Brazilian stocks advanced to a four-week high, following crude and metal prices higher. Oil company Petroleo Brasileiro SA (PETR4) added 3.9 percent and miner Vale SA rose 4 percent. The real appreciated 2.2 percent against the dollar, the most among 25 emerging-market currencies tracked by Bloomberg.
The ruble strengthened 1.4 percent as oil, Russia’s largest export earner, jumped. OAO Sberbank (SBER), Russia’s biggest lender, rose 3.8 percent in Moscow, helping the Micex Index (MICEX) increase 3 percent.
Hungary sold three-month Treasury bills at 7.67 percent, the highest since August 2009, after lawmakers approved regulations Dec. 30 that reduced powers of the president of the central bank, despite opposition from the International Monetary Fund and the European Union. The BUX Index slid 0.9 percent and the forint weakened 0.7 percent against the euro.
Lawmakers in Prime Minister Viktor Orban’s Fidesz party last week approved a law that expands the rate-setting Monetary Council while curbing the power of Central Bank President Andras Simor. The IMF and the EU broke off talks on a bailout last month over the plan.
The extra yield (JPEGSOSD) investors demand to own emerging-market debt over U.S. Treasuries fell twelve basis points, or 0.12 percentage point, to 414, according to JPMorgan Chase & Co. (JPM)’s EMBI Global Index.
To contact the editor responsible for this story: Darren Boey at firstname.lastname@example.org