Emerging-Market Stocks Rise for a Fourth Day on U.S. Data
Emerging-market stocks rose for a fourth day, the longest winning streak in more than two weeks, after an unexpected rebound in U.S. manufacturing improved the outlook for exporters.
The MSCI Emerging Markets Index (MXEF) climbed 0.1 percent to 1,006.23. Samsung Electronics Co. (005930), which got 20 percent of its sales from America last year, climbed to a five-month high in Seoul. Equity gauges in Indonesia, Turkey and Mexico increased. Brazil’s Bovespa index dropped with homebuilder Gafisa SA among the biggest decliners.
U.S. manufacturing unexpectedly expanded last month and Chinese new export orders for September rose from the month before, reports showed yesterday. Federal Reserve Chairman Ben S. Bernanke pledged to maintain record economic stimulus, stoking appetite for riskier assets. The developing nations’ gauge pared some of its gains after Spanish Prime Minister Mariano Rajoy says he has no plans to request a bailout soon.
“The latest data from the U.S. showed manufacturing is back in expansionary territory and that was a nice upside surprise given that emerging markets are driven by exports for the most part,” Alec Young, a New York-based global equity strategist at S&P Capital IQ, said by phone today. “The liquidity rally needs to transition to a growth rally, and the PMI is evidence that growth is stabilizing. We need to see more of it but it’s a good first step.”
The iShares MSCI Emerging Markets Index exchange-traded fund, the ETF (EEM) tracking developing-nation shares, increased 0.1 percent. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, slid 3.6 percent.
A gauge of technology companies added 0.7 percent, the biggest gain in the MSCI Emerging Markets Index today. Indonesia’s Jakarta Composite Index rose 0.5 percent while Taiwan’s Taiex Index (TWSE) gained 0.6 percent.
“As the U.S. starts to pick up, global trade will eventually pick up,” said Fitzgerald Aclan, who helps manage $20 billion at Manila-based BDO Unibank Inc. (BDO) “Bernanke’s statement eases investors’ fears as it reduces the probability of a liquidity crunch.”
Bernanke renewed a pledge to sustain record stimulus yesterday and defended the Fed’s unprecedented bond buying, saying it will spur growth, cut unemployment, help savers and support the dollar.
The Bovespa slid 0.6 percent with Gafisa SA, Brazil’s sixth-biggest homebuilder, losing 8.3 percent.
Kia Motors Corp. (000270), South Korea’s second-biggest automaker, gained the most in two weeks after BS Securities Co. said the stock’s a bargain at current levels. Kia increased 3.5 percent. The company’s third-quarter operating profit likely rose 14.7 percent from a year ago, Choi Dae Sik, analyst at BS Securities, wrote in a note today.
The Moscow-based Micex Index (VXEEM) retreated 0.3 percent, the first decline in four days, as Urals crude, Russia’s main export blend, slid for a second day. The benchmark gauges in the Czech Republic and Dubai declined.
OAO Mechel, Russia’s largest producer of coal for steelmaking, sank 3.5 percent after reporting a net loss in the second quarter. Turkiye Garanti Bankasi AS (GARAN), the biggest Turkish bank by market value, jumped 1.6 percent after Societe Generale SA upgraded the stock from hold.
EVA Airways Corp. (2618), Taiwan’s second-largest air carrier, climbed 3.2 percent, the most since July 27, after Taiwan Premier Sean Chen said the U.S. is expected to announce a visa waiver for the island’s residents in the “instant future.”
China Airlines Ltd. (2610), the biggest carrier, rose 2.9 percent. Phoenix Tours International Inc. and Star Travel Corp. jumped by the 6.9 percent daily limit.
Taipei-based Central News Agency reported U.S. Secretary of State Hillary Clinton may make an announcement today, allowing Taiwanese to travel visa-free to the U.S., citing unidentified diplomatic sources. Premier Chen’s comment was included in an e- mailed statement from the Cabinet today.
The extra yield investors demand to own emerging-market dollar bonds over U.S. Treasuries slid two basis points, or 0.02 percentage point, to 302, according to JPMorgan’s EMBI Global Index.
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