Emerging-Market Stocks at One-Month High Amid Chinese Policy Speculation
Jan. 10 (Bloomberg) -- Shen Jianguang, an economist at Mizuho Securities Asia Ltd., talks about the outlook for the Chinese economy and the yuan. He speaks from Hong Kong with Linzie Janis on Bloomberg Television's "Countdown." (Source: Bloomberg)
Emerging-market stocks rose to a one-month high amid speculation China will loosen monetary policies to bolster economic growth and on signs European leaders are increasing efforts to tackle the debt crisis.
The MSCI Emerging Markets Index (MXEF) advanced 1.9 percent to 948.82 at the close in New York, the highest since Dec. 7. The Shanghai Composite Index (SHCOMP) climbed 2.7 percent. The BSE India Sensitive Index (SENSEX) jumped 2.2 percent and the Micex Index (MICEX) gained 2 percent in Moscow as oil rose. Brazil’s Bovespa rose 1.2 percent.
Chinese stocks posted the biggest three-day gain since October after a government report showed import growth fell to a two-year low in December. German Chancellor Angela Merkel and International Monetary Fund Managing Director Christine Lagarde discussed Greece and efforts to resolve the euro-area debt crisis during talks in Berlin late today. U.S. consumer credit increased by $20.4 billion, the biggest jump since November 2001, to $2.48 trillion, Federal Reserve figures showed.
“Better U.S. data, and hopes of progress in Europe from the Merkozy axis continues to shore up sentiment in the short term,” Timothy Ash, chief emerging markets economist at the Royal Bank of Scotland Group Plc in London, said in a client note. “That said, investors appear only prepared to dip their toes in risk rather than plunging in head first just yet.”
Merkel, Lagarde
Merkel met French President Nicolas Sarkozy yesterday as European leaders flesh out a rulebook for budgetary discipline negotiated at a Dec. 9 summit that seeks to create a “fiscal compact” for the 17-member euro area. In today’s discussions, Merkel and Lagarde “renewed their commitment to the goal of strengthening growth and employment in Europe in a sustainable way,” Steffen Seibert, Merkel’s chief spokesman, said in a text message.
Emerging market shares have advanced 3.5 percent so far this year, besting the 2.1 percent gains for developed-nation stocks, as higher commodity prices and optimism the euro-area debt crisis may be resolved boost equities. Developing-country stocks trade at 9.7 times estimated earnings, trailing the 11.7 ratio for developed markets.
Chinese stocks extended gains today after a report showed the nation’s exports rose 13.4 percent last month, matching economists’ forecasts. Import growth slowed more than estimated, boosting speculation the government may loosen monetary policy to spur economic growth.
The Bovespa (IBOV) closed at the highest since July 25 as commodities rallied, boosting oil companies Petroleo Brasileiro SA and OGX Petroleo & Gas Participacoes SA. Cia. Hering (HGTX3), Brazil’s second-biggest clothing retailer, jumped 3 percent after it said fourth-quarter gross revenue rose 23 percent from a year earlier.
The Standard & Poor’s GSCI index of 24 raw materials climbed 0.9 percent.
Hungary Talks
The BUX Index (BUX) gained 2.4 percent in Budapest. Tamas Fellegi, Hungary’s chief negotiator for a financial bailout, started talks with the International Monetary Fund in Washington yesterday, state news service MTI reported, citing a statement from the country’s embassy there.
The ISE National 100 Index advanced 1.9 percent in Istanbul, heading for its first increase in five days. Turkiye Halk Bankasi AS (HALKB), a state-run bank, climbed 3.9 percent, making it the biggest gainer among banks in Turkey. Halkbank is least exposed to risks from an economic downturn, according to a Goldman Sachs Group Inc. “stress test” on Turkish banks published today.
The Kospi Index (KOSPI) gained 1.5 percent in South Korea and the FTSE/JSE Africa All Share Index (JALSH) rose 0.8 percent as metal prices climbed.
Real to Gain
Twenty of the 25 emerging-market currencies tracked by Bloomberg appreciated against the dollar. The real advanced 1.9 percent while the rupee added 1.6 percent.
Standard Chartered Plc, the most-accurate Brazilian real forecaster over the past 18 months, predicts the currency will advance 12 percent this year to 1.65 per dollar from 1.8332 yesterday. The real plunged 11 percent last year.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell two basis points, or 0.02 percentage point, to 425, according to JPMorgan Chase & Co.’s EMBI Global Index.
To contact the reporters on this story: Jason Webb in London at jwebb25@bloomberg.net; Zachary Tracer in New York at ztracer1@bloomberg.net.
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
Rate this Page