Emerging-Market Stocks Extend Monthly Gain on ECB Loans, U.S. GDP Growth

Emerging-market stocks advanced, capping a monthly gain, after the European Central Bank provided lenders with more money than economists had forecast and the U.S. economy grew faster than expected.

The MSCI Emerging Markets Index (MXEF) gained 1 percent to 1,079.44 at the close in New York. The gauge’s two-month advance is the first since April. Technology companies led advances as Asustek Computer Inc. (2357) in Taiwan forecast higher laptop shipments. Erste Group Bank AG (EBS) surged 6.1 percent in Prague, boosting the benchmark PX Index to the biggest gain in more than a week, after reporting fourth-quarter net income that beat analysts’ estimates.

The Frankfurt-based ECB said today it will lend 800 financial institutions 529.5 billion euros ($705.7 billion) for three years. Economists had predicted an allotment of 470 billion euros, according to the median of 28 estimates in a Bloomberg News survey. The U.S. economy expanded at a revised 3 percent annual rate in the fourth quarter, the most since the second quarter of 2010, Commerce Department figures today showed.

“We’re starting to cautiously move into a more optimistic scenario and into a more constructive and normalized backdrop and that obviously provides financial markets with the opportunity to rally,” Simon Quijano-Evans, an emerging-markets economist at ING Groep NV, said by phone from London. “It’s essentially leaving 2009 back there as a once-in-a-century event and no longer comparing 2012 to it.”

Developed-nation stocks fell 0.3 percent, reversing earlier gains of as much as 0.6 percent, after U.S. Federal Reserve Chairman Ben S. Bernanke’s remarks to Congress damped speculation of more quantitative easing. Emerging-market equities pared an advance of as much as 1.5 percent. Developed- market shares gained 4.7 percent in February, underperforming emerging markets for a second month.

Brazil, Russia

Brazil’s Bovespa stock index reversed earlier gains and fell 0.2 percent. Gafisa SA (GFSA3), Brazil’s third-largest homebuilder by revenue, fell 7 percent, the most on the Bovespa, after rejecting a proposal from GP Investimentos and Equity International to acquire some assets.

OAO Lukoil (LKOH), Russia’s second-largest oil producer, jumped 2.3 percent in Moscow as Brent oil gained, helping the Micex Index (MICEX) snap a two-day decline. Erste Group Bank AG (RBAG) led the PX Index (PX) to a 1.9 percent advance.

Asustek Computer jumped 7 percent in Taipei after saying notebook shipments will increase 22 percent this year, helping a gauge tracking technology companies on MSCI’s developing-nation index to a 2.3 percent advance. Taiwan’s Taiex Index (TWSE) gained 2 percent, the most in three weeks.

China, South Korea

China’s Shanghai Composite Index (SHCOMP) fell 1 percent, its first drop in nine days, on concern the government will retain measures to curb gains in housing prices this year.

South Korea’s Kospi Index (KOSPI) jumped after a government report showed production climbed 3.3 percent in January, surprising economists who forecast a decline.

Brazil’s real plunged 1.3 percent, the most among 25 emerging-market currencies tracked by Bloomberg, after a government official said the country is considering currency measures to stem gains that made the real the best-performing major currency this year before today. The official, who asked not to be identified because a final decision hasn’t been taken, declined to give details on the measure.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell nine basis points, or 0.09 percentage point, to 356, according to JPMorgan Chase & Co.’s EMBI Global Index.

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net Jason Webb in London at jwebb25@bloomberg.net.

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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