Emerging-market stocks rose to a six-month high and the yield premium on developing-nation debt dropped to the lowest since October as signs of U.S. growth and prospects Greece will get its bailout boosted riskier assets.
The MSCI Emerging Markets Index (MXEF) gained 1.3 percent to 1,062.46 at the close in New York, the highest since Aug. 4. The extra yield demanded by investors to hold emerging-country bonds over U.S. Treasuries narrowed to 374 basis points, the least since Oct. 28, JPMorgan Chase & Co. data showed.
An index of leading U.S. indicators rose in January and the cost of living climbed less than forecast, Conference Board and government data showed, a day after a report showed jobless claims slid to the lowest level since 2008 in January. A “solution” to outstanding issues blocking Greece from getting its second rescue package will be found, said Steffen Seibert, German Chancellor Angela Merkel’s chief spokesman.
“If the U.S. economy looks better, the global growth outlook looks more positive,” Michael Ganske, head of emerging- markets research at Commerzbank AG, said by phone from London. “Investors are already positioned for a risky scenario in Greece” so it is no longer a force pushing down markets, Ganske said.
Brazil’s Bovespa (IBOV) rose for a third day, led by Cia Brasileira de Distribuicao Grupo Pao de Acucar, after the nation’s biggest retailer reported fourth-quarter profit that beat the average of analyst estimates.
Equity Fund Inflows
The PX Index (PX) reached a one-week high in Prague as Telefonica Czech Republic AS (SPTT) jumped the most since October 2008 after net income rose 50 percent. China Life Insurance Co. (2628), the nation’s biggest insurer, reached a six-month high in Hong Kong trading, sending the Hang Seng China Enterprises Index of mainland shares to the highest level since August. The Philippine Stock Exchange Index (PCOMP) jumped 2.4 percent to a record.
Investors added $2.19 billion to emerging-markets equity funds in the week ended Feb. 15, while pulling assets from developed markets, according to data researcher EPFR Global. About 40 percent of the $47 billion pulled out of emerging- market stock funds last year has been returned in 2012, the research firm said by e-mail today.
MSCI’s emerging-market gauge has gained 16 percent this year, beating the 8.9 percent increase for the MSCI World Index (MXWO) of developed-market shares. The developing-nation index trades at 10.7 times estimated earnings, compared with 12.8 times for the MSCI World measure.
The Bovespa gained 0.1 percent, bringing its advance in the week to 3.4 percent. Pao de Acucar surged 5.7 percent to 79.20 reais, a record close.
Argentina’s Merval Index (MERVAL) gained 1.1 percent to a two-week high, as Telecom Argentina SA (TECO2) rose the most in more than two weeks after reporting that net income in the last three months of 2011 increased 18 percent.
China Life advanced 3.5 percent to HK$23.60, the highest level since Aug. 5, as the insurer said premium income rose 12 percent in January. The Hang Seng China Enterprises Index (HSCEI) rose 1.2 percent to the highest since Aug. 4.
Anglo American Plc (AAL), a diversified miner that makes up about 9 percent of the South African index, jumped 1.9 percent, its first gain in four days, after the company said profit rose 23 percent last year as iron-ore and copper output increase.
The Philippine Stock Index ended three days of losses to close at a record-high 4880.71 after foreign investment into the Southeast Asian nation climbed in January. Net overseas investment in Philippine stocks, bonds and deposits rose last month, the central bank reported yesterday.