Emerging Stocks Gain Most in Month on U.S. Sales Data

Emerging-market stocks rose the most in three weeks after U.S. retail sales beat estimates and as a report showed German investor sentiment is improving, boosting prospects for exports.

The MSCI Emerging Markets Index rallied 0.8 percent to 1,003.35 at the close of trading in New York, the biggest gain since Sept. 21. Samsung Electronics Co. surged the most in more than a month in Seoul. The Bovespa gained 0.2 percent as Vale SA (VALE3), the world’s biggest iron-ore producer, jumped on speculation infrastructure investments in China will boost the commodity. Turkey’s ISE National 100 Index (XU100) rose to the highest level in almost two years.

The Commerce Department announced yesterday that retail sales in the U.S. climbed 1.1 percent in September, compared with the 0.8 percent expansion forecast by economists. German investor confidence gained for a second month in October, the ZEW Center for European Economic Research in Mannheim said today. The 21 nations in MSCI’s developing-nations gauge send about 30 percent of their exports to the European Union and 13 percent to the U.S. on average, according to data compiled by the World Trade Organization.

“There is positive news where there wasn’t two months ago,” Charles Robertson, global chief economist at Renaissance Capital in London, said by telephone. “There is a growing belief we might avoid a hard landing.”

Turkish Banks

Equities in Istanbul gained 0.7 percent to the highest level since November 2010. Asya Katilim Bankasi AS (ASYAB) surged 3 percent, the most since Sept. 10, after JPMorgan Chase & Co. named Turkish banks among its top picks for central and eastern Europe. Benchmark stock indexes in the Czech Republic, Poland, South Korea and Taiwan also gained.

The Bovespa advanced for a third day. Vale’s preferred shares surged 2 percent as Fortescue Metals Group Ltd. said iron-ore is poised to rally to the highest level since July on speculation that infrastructure investments in China, the biggest buyer, will buoy demand. Power utility Cia. Energetica de Minas Gerais rose 1.5 percent after excluding three hydropower plants from a list of possible concession renewals, shielding it from lower prices imposed by the government.

The BSE India Sensitive Index fell 0.7 percent to 18,577.70, the lowest since Sept. 20. Vietnam’s VN Index (VNINDEX) rose for the first time in four days, jumping 2 percent after Prime Minister Nguyen Tan Dung maintained power at the end of a two- week meeting to assess the performance of the ruling Communist Party. The gauge climbed the most among Asian benchmark indexes.

South Korea’s Kospi index advanced 0.8 percent and the Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong slid 0.1 percent, reversing an earlier gain of as much as 0.6 percent.

Samsung, Reliance

The forint strengthened 0.6 percent versus the euro, the best performing emerging-market currency today, as Hungary worked to obtain an aid deal from the International Monetary Fund.

All 10 industry groups in the MSCI Emerging Markets index (MXEF) rose, led by information technology shares. The developing- nations gauge has advanced 9.5 percent this year, trailing a 12 percent gain in the MSCI World Index of developed countries. The emerging-markets measure trades at 11.5 times estimated earnings, compared with the MSCI World’s multiple of 13.3, according to data compiled by Bloomberg.

Samsung surged 2.3 percent in Seoul. ZTE Corp. (000063), China’s second-biggest phone-equipment maker, fell 4.2 percent in Shenzhen after the company said it probably posted a loss in the third quarter. Reliance Communications Ltd. dropped 4.9 percent in Mumbai, the biggest loser on the MSCI Emerging Markets Index.

Federal Grid Gains

Federal Grid Co. rose 1.7 percent in Moscow as Russian President Vladimir Putin decided against a proposed merger of the monopoly for high-voltage power transmission with distributor OAO MRSK Holding. Putin approved creating a management company for the country’s power grids, Energy Minister Alexander Novak told reporters yesterday after a government meeting.

The iShares MSCI Emerging Markets Index exchange-traded fund, the ETF tracking developing-nation shares, advanced 1 percent. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index (VXEEM), a measure of options prices on the fund and expectations of price swings, fell 4.4 percent.

Axis Bank Ltd. (AXSB), India’s fourth-largest private lender by market value, climbed 2.4 percent after reporting profit rose 22 percent in the quarter ended Sept. 30.

Poly Property Group Co. jumped 6.8 percent, the biggest advance since Sept. 7, in Hong Kong trading, while KWG Property Holding Ltd. (1813) gained 8.2 percent and Evergrande Real Estate Group Ltd. (3333) rose 5.1 percent. New home sales volume in 54 major cities in China increased by 210 percent in the second week of October from a week earlier, Securities Times reported.

PT Bumi Resources (BUMI) fell 1.4 percent in Jakarta after Nathaniel Rothschild quit the board of Bumi Plc.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell nine basis points, or 0.09 percentage point, to 278, according to JPMorgan Chase & Co.’s EMBI Global Index.

To contact the reporters on this story: Maria Levitov in London at mlevitov@bloomberg.net; Julia Leite in New York at jleite3@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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