Emerging-Market Stocks Rise as U.S. Outlook Boosts Assets

Emerging-market stocks had their biggest advance in two weeks as Brazil gained on increased optimism about Vale SA (VALE5)’s performance.

Vale SA, the world’s second-largest mining company, jumped 1.7 percent in Sao Paulo after saying it will meet its sales target for this year. Brazil’s Bovespa added 0.7 percent. The MSCI Emerging Markets Index (MXEF) advanced 0.4 percent to 1,015.94 in New York. Fenerbahce Sportif Hizmetler Sanayi & Ticaret (FENER) AS rose to its highest since August, lifting Turkey’s stock gauge by 1.2 percent.

U.S. data showed pending home sales increased more than forecast in March as low interest rates drew more buyers into the market. The index of pending home purchases rose 4.1 percent, compared with the 1 percent median forecast of 43 economists surveyed by Bloomberg.

Vale’s production and sales “rebounded in March and should continue strong in the second quarter,” Bruno Piagentini, an equity analyst at Coinvalores Corretora de Valores, said. “The market realized the drop in sales and the rise in costs in the first quarter was temporary. Vale is returning to the company that we’re familiar with.”

MSCI’s developing-nations gauge has climbed 11 percent this year and trades at 10.6 times estimated profit. That compares with a multiple of 12.5 times for the MSCI World Index (MXWO) of advanced countries, which has added 9.4 percent in 2012.

Gains in Brazil

The IShares MSCI Emerging Markets Index exchange-traded fund, the most-traded ETF to track developing-nation shares, rose 0.6 percent to $42.25 in New York.

The Chicago Board Options Exchange Emerging Markets ETF Volatility Index (VXEEM), a gauge of options prices on the fund and expectations of price swings, tumbled 5.5 percent to 24.18.

Cielo SA, Brazil’s biggest card-payment processor by market value, added 7.1 percent to 55.62 reais. The company said its net income increased 33 percent to 566.6 million reais in the first quarter, according to a regulatory filing yesterday. That beat the median estimate of 514.5 million reais for adjusted net income in a Bloomberg survey of eight analysts.

Brazil’s Banco BTG Pactual SA (BBTG11), led by billionaire Andre Esteves, climbed 0.6 percent to 31.45 reais after raising as much as 3.66 billion reais in the biggest initial public offering in the country since 2009.

Company shares traded on the Mexican Stock Exchange gained 0.4 percent in Mexico City after Grupo Financiero Banorte S.A.B. de C.V. (GFNORTEO), a financial institution, rose 4.2 percent. Cemex SAB (CEMEXCPO), that largest cement maker in the Americas, slipped 0.2 percent after reporting first-quarter losses narrowed.

MICEX drops

Russia’s MICEX Index slipped 1 percent as shares of IDGC Holding JBC, a managing company for electricity distributors in Russia, declined 5.8 percent, the most in a month.

The Moscow-based company will announce earnings for the year ended Dec. 31 tomorrow and will probably report that sales grew 14.1 percent to $636.5 billion, according to the median estimate of 14 analysts surveyed by Bloomberg.

AngloGold Ashanti Ltd. (ANG), the world’s third-biggest gold producer, rose 3.7 percent, the most in three months, lifting South Africa’s FTSE/JSE Africa All Share Index (JALSH) for a third day. The gauge added 0.7 percent while Gold Fields Ltd. (GFI), the country’s second largest producer of the metal, climbed 3.4 percent.

Gold rose the most in two week on speculation that the Federal Reserve may increase stimulus measures to bolster the U.S. economy after more Americans than forecast filed applications for unemployment benefits last week.

Futures for June delivery rose 1.1 percent to settle at $1,660.50 an ounce on the Comex in New York, the biggest gain for a most-active contract since April 12.

Turkey Advances

In Turkey, the benchmark National 100 Index (XU100) rose 1.2 percent. Fenerbahce climbed as much as 13 percent after Vatan newspaper reported that an ethics commission found no evidence that jailed Fenerbahce soccer club president Aziz Yildirim was involved in a bribery scandal.

Hungarian equities slipped 0.2 percent to their first decline in three days. Prague’s PX Index (PX) dropped 0.5 percent, its first loss in three days.

South Korea’s gross domestic product rose 0.9 percent in the first quarter from the previous three months, the Bank of Korea said today. The growth is at the fastest pace in a year, boosted by government spending and investments by semiconductor chipmakers as European nations stepped up efforts to ease a debt crisis that has crimped Asian exports.

The Kospi Index gained 0.1 percent and Indonesia’s Jakarta Composite index added 0.4 percent after dropping 0.2 percent yesterday.

The Hang Seng China Enterprises Index (HSCEI) of China stocks increased 0.9 percent, while the Taiex Index (TWSE) lost 0.6 percent after Taiwan’s Cabinet approved a plan to tax capital gains on securities trading from next year. The Shanghai Composite Index (SHCOMP) was little changed with 344 companies advancing and 536 falling.

China Railway

CSR Corp., a Chinese train maker, surged 7.1 percent in Hong Kong for its highest close since July after Citigroup Inc. recommended buying the shares. Citigroup raised the stock to buy from sell and upgraded the Chinese railway industry to neutral from negative. Rail builder China Railway Group Ltd. (601390) climbed 4 percent.

China may finally reform its rail industry, which is controlled by the Ministry of Railways, Citigroup said in a report dated yesterday. Reforms may allow large regional operators to be responsible for their own profitability, it said.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose one basis points, or 0.01 percentage point, to 353, according to JPMorgan Chase & Co.’s EMBI Global Index.

To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net;

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net.

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