Emerging-market stocks climbed as better-than-expected German investor confidence data and U.S. retail sales rising by the most in five months bolstered the global economic outlook.
The MSCI Emerging Markets Index (MXEF) advanced 1.5 percent to 1,066.54 as trading closed in New York. LLX Logistica SA (LLXL3) jumped to a six-month high in Sao Paulo and Brazil’s Bovespa Index (IBOV) gained the most since October to the highest level in 11 months. Turkiye Garanti Bankasi AS (GARAN) advanced in Istanbul as UBS AG raised Turkish stocks to overweight in its portfolio of emerging market equities.
German investor confidence climbed to a 21-month high in March, to a stronger level than the median of 36 estimates compiled by Bloomberg, while U.S. retail sales rose in February by 1.1 percent, following a 0.6 percent increase in January, government data showed. The best six months of job gains since 2006 are reducing the odds of a third round of Federal Reserve asset purchases, or quantitative easing, according to a Bloomberg survey of economists.
“The European recession is a big fear that a lot of investors have, so when better data comes out of Europe, that helps,” Greg Lesko, who manages $700 million at Deltec Asset Management in New York, said by phone. “The US economy seems to be doing OK.”
Emerging-market stocks have jumped 16 percent this year, beating the 11 percent advance for developed-market shares. The MSCI developing-markets gauge trades for 11 times estimated earnings, compared with the 13 times for developed-country stocks on the MSCI World Index, data compiled by Bloomberg show.
Turkey’s ISE National 100 Index (XU100) rose 0.6 percent in Istanbul, gaining for the first time in three days. Turkiye Garanti Bankasi, the nation’s second-largest lender, rose 0.9 percent. Turkish companies are “highly profitable,” and “the market looks attractively valued,” UBS strategists, including Nicholas Smithie in New York and Stephen Mo in London, wrote in a report.
The Bovespa (IBOV) jumped 3 percent in Brazil, led by an 8 percent increase in LLX, the port company controlled by Brazilian billionaire Eike Batista. Bradespar SA (BRAP4), the investment arm of Banco Bradesco SA, advanced 3.8 percent, the most since December.
The Micex Index (MICEX) climbed 0.5 percent in Moscow as oil, Russia’s biggest export earner, rose 0.4 percent in New York. Russia’s central bank kept the refinancing rate at 8 percent in a review today.
The Hang Seng China Enterprises Index (HSCEI) of Chinese stocks listed in Hong Kong, Taiwan’s Taiex Index (TWSE) and South Korea’s Kospi Index (KOSPI) each increased more than 1 percent. The BSE India’s Sensitive Index (SENSEX), or Sensex, climbed 1.3 percent on speculation the government will deliver a growth-oriented budget this week.
Stocks in South Korea and India are poised to lead gains the MSCI Emerging Markets Index in 2012, spurred by Asia’s high levels of foreign investment into equities, according to Prudential International Investments Advisers.
South Korea, where the Kospi has climbed 11 percent this year, ranked first with $9.1 billion in investment into equities. India was second with $7.4 billion in inflows, which helped the Sensex gain 15 percent in the same period.
The iShares MSCI Emerging Markets Index exchange-traded fund, the most-traded ETF that tracks developing-nation shares, gained 2.7 percent in New York to $44.49, the most since Jan. 3.
The Brazilian real appreciated for the first time in three days against the dollar, rising 0.3 percent to 1.7922 per dollar.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell 13 basis points, or 0.13 percentage point, to 326 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.