Emerging-Market Stocks Gain to Two-Week High on Rising Earnings

Emerging-market equities rallied to a two-week high, led by consumer and technology stocks, as rising corporate profits extended 2012 gains while trimming a loss for April.

The MSCI Emerging Markets Index added 0.6 percent to 1,026.02 at the close of trading in New York, the highest since April 13. The gauge of developing-nation equities has advanced 12 percent this year. Lupatech SA (LUPA3), Brazil’s biggest provider of oil equipment and services, gained for a third day, climbing 3 percent to 5.12 reais as the Bovespa index advanced. Samsung SDI Co., a Gyeonggi, Korea-based company that supplies Apple Inc., surged the most since October, helping the Kospi Index gain for a third day.

Bank of Communications Co Ltd., China’s fifth-biggest lender, had its greatest advance since Feb. 28 after reporting first-quarter net income on April 27 of 15.9 billion yuan ($2.5 billion), beating analysts’ predictions by 4 percent. Data showing Spain’s economy contracted less in the first quarter than the Bank of Spain had estimated boosted riskier assets.

“We’ve seen a lot of big name companies produce big results so it’s a decent sign that there is more global activity and demand out there,” Tim Hall, who manages about $700 million at Deltec Asset Management, said by phone from New York. “Spain having a GDP that wasn’t as bad as what people feared is good.”

Consumer spending in the U.S. climbed 0.3 percent in March, Commerce Department figures showed today. The median estimate of 72 economists surveyed by Bloomberg News called for a rise of 0.4 percent.

Winning Streak

The five-day gain in the MSCI Emerging Markets Index (MXEF) is its longest winning streak since Jan. 23, paring this month’s slide to 1.5 percent. The gauge trades at 10.6 times estimated profit that compares with a multiple of 12.5 times for the MSCI World Index of advanced countries, which has added 9.4 percent in 2012.

The IShares MSCI Emerging Markets Index exchange-traded fund, the most-traded ETF to track developing-nation shares, fell 0.2 percent to $42.22 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, rose 5.5 percent to 24.82, its first gain in five days.

BRF - Brasil Foods SA (BRFS3) dropped 2.8 percent in Sao Paulo after the world’s largest poultry exporter reported first- quarter profit that missed analysts’ estimates after demand in Asia and the Middle East weakened. Sales dropped 5.4 percent to 6 billion reais in the quarter.

Cia. Paranaense de Energia, known as Copel, the largest electricity distributor in Brazil’s southern region, advanced 3.6 percent to lead gains in the index.

The Bovespa (IBOV) has fallen 4.2 percent this month and gained 8.9 percent in 2012. Mexico’s IPC benchmark index rose 0.3 percent today, paring the monthly loss to 0.2 percent for April.

Samsung Electronics

Samsung Electronics Co. (005930), Asia’s biggest maker of chips and flat screens, gained 1.2 percent to a record close after Nomura Holdings Inc. raised its share-price estimate for the stock 33 percent.

Samsung SDI, the world’s largest maker of lithium-ion batteries, jumped 7.9 percent to an eight-month high following a rally of 7.5 percent on April 27. The company reported first- quarter operating profit of 67 billion won ($59.3 million).

Market Movement

The BET Index (BET) slid 0.2 percent in Bucharest after the government collapsed for the second time this year on April 27.

The ISE National 100 Index (XU100) slipped 1 percent in Istanbul while the WIG20 Index (WIG20) fell 0.2 percent in Warsaw.

The FTSE/JSE Africa All Shares (JALSH) Index gained 0.4 percent as BHP Billiton Ltd. (BIL), the world’s largest mining company, rose 1.3 percent to its highest level since Feb. 29.

South Korea’s Kospi Index rose 0.3 percent. Samsung Heavy Industries Co. rallied 5.8 percent after posting profit that beat analysts’ estimates. The BSE India Sensitive Index (SENSEX), or Sensex, climbed 0.8 percent.

Stock markets in China, Russia and Hungary were closed for holidays.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell five basis points, or 0.05 percentage point, to 348, according to JPMorgan Chase & Co.’s EMBI Global Index.

To contact the reporters on this story: Christine Harvey in New York at charvey32@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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