Emerging Stocks Advance to Week High on U.S. Data; China Slumps

Emerging-market stocks reached the highest in more than a week after the U.S. Federal Reserve raised its economic assessment, outweighing concern that China may keep property curbs in place longer than anticipated.

The MSCI Emerging Markets Index (MXEF) advanced 0.4 percent to 1,070.51 as of 11:47 a.m. in London, the highest since March 5. China’s Shanghai Composite Index (SHCOMP) sank 2.6 percent, the biggest drop since Nov. 30, after Premier Wen Jiabao said easing constraints on the property market would lead to “chaos.” Poly Real Estate Group Co. (600048), China’s second-largest developer by market value, slumped 3 percent in Shanghai. Turkey’s ISE National 100 Index gained 1.9 percent, as benchmark gauges in Poland and Hungary added more than 1 percent.

Strains in global financial markets have eased and the labor market is gathering strength, the Fed said yesterday. Fifteen of the nation’s largest 19 banks could maintain adequate capital levels even in a recession, the central bank said separately. U.S. retail sales increased 1.1 percent in February.

“A recovery in the U.S. signals that demand for products supplied from around the world will improve,” Fadlul Imansyah, who helps manage about $196 million at PT CIMB Principal Asset Management in Jakarta, said by phone today. Tight policies in China “can cause all kinds of businesses to delay expansion,” he said.

A gauge tracking Chinese property stocks in Shanghai sank 3.7 percent. Anhui Conch Cement Co. (600585), the nation’s biggest maker of the building material, fell 3.3 percent.

Russia, South Africa

The Micex Index (MICEX) advanced 0.9 percent in Moscow and the FTSE/JSE Africa All Shares Index (JALSH) rose 0.8 percent in Johannesburg. South Korea’s Kospi Index (KOSPI) gained 1 percent.

United Co. Rusal (RUALR) headed for a seven-week low, dropping as much as 3.4 percent in Moscow after billionaire Chairman Victor Vekselberg’s resignation stoked concern a shareholder dispute will hurt the world’s biggest aluminum producer.

Naspers Ltd. (NPN), Africa’s largest media group, rose 2.7 percent, headed for its biggest gain in more than three months, after fourth-quarter profit at Tencent Holdings Ltd. (700), in which Naspers owns a 35 percent stake, rose 15 percent. Tencent is China’s biggest Internet company by revenue.

India’s BSE India Sensitive Index (SENSEX), or Sensex, rose 0.7 percent, paring a gain of as much as 1.3 percent after the nation’s inflation accelerated for the first time in five months in February, weakening the case for an interest-rate cut to counter slower economic growth. The benchmark wholesale-price index rose 6.95 percent from a year earlier, after climbing 6.55 percent in January, the commerce ministry said in a statement in New Delhi today.

Taiwan Semiconductor Manufacturing Co. (2330), which earned more than half of its 2010 revenue from the U.S., gained 2.3 percent. Samsung Electronics Co. (005930), South Korea’s largest consumer electronics exporter, jumped 2.4 percent to a record high after iSuppli said the company will supply the touch screen for Apple Inc.’s new iPad.

To contact the reporters on this story: Berni Moestafa in Jakarta at bmoestafa@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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