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Emerging Stocks Advance on China Growth as India Refiners Rally

Emerging-market stocks completed a second weekly advance this year and a gauge of Chinese companies hit a 17-month high as the nation’s economic growth accelerated. Rising metal prices boosted equities in Russia and South Africa.

Taiwan Semiconductor Manufacturing Co. (2330) climbed the most in two weeks in Taipei after forecasting sales that beat analyst estimates, leading technology companies higher. Bharat Petroleum Corp. (BPCL) rallied to a record in Mumbai, while Indian Oil Corp., the nation’s biggest state refiner, jumped the most in two years as the government allowed oil companies to raise diesel prices. Shares in Russia climbed to a nine-month peak as OAO Sberbank rallied. Banco do Brasil SA drove the Bovespa Index lower.

The MSCI Emerging Markets Index rose 0.7 percent last week to 1,080.74 in New York, the highest since Jan. 3. China’s economic growth accelerated for the first time in two years as government efforts to revive demand spurred a rebound in industrial output, retail sales and the housing market, data from Beijing showed today.

“We’ve seen a big surge across most risk markets,” said Mohammed Nalla, head of strategic research at Nedbank Group Ltd. in Johannesburg. “If we see a bottoming and a bit of a rebound come through from China, then that would bode well for commodity prices; that’s been construed as quite a positive internationally.”

Consumer Confidence

The iShares MSCI Emerging Markets Index exchange-traded fund, the ETF tracking developing-nation shares, added 0.2 percent to 44.78. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index (VXEEM), a measure of options prices on the fund and expectations of price swings, dropped 6.8 percent.

China’s gross domestic product rose 7.9 percent in the fourth quarter from a year earlier, the National Bureau of Statistics said in Beijing today. That compared with the 7.8 percent median estimate in a Bloomberg News survey and 7.4 percent in the previous period. December industrial output and fixed-asset investment for the year also increased.

U.S. consumer confidence unexpectedly declined in January. The Thomson Reuters/University of Michigan consumer sentiment index decreased to 71.3 percent in January from 72.9 the prior month. The gauge was projected to climb to 75, according to the median forecast of 74 economists surveyed by Bloomberg news.

The 21 nations in MSCI’s developing-nations gauge send about 17 percent of their exports to the U.S. and 26 percent to the European Union on average, data compiled by the World Trade Organization show.

“The Michigan number was lower than expected, but the Chinese numbers helped and are pretty firm overall,” Aryam Vazquez, an economist at Wells Fargo & Co. in New York, said by phone today. “The underlying scope for a pullback remains in play as a result of the debt ceiling debates here in the U.S. and a structurally weak recovery across the mature economies.”

Brazil, India

House Republicans plan to vote next week on a three-month extension of U.S. borrowing authority in an effort to force the Democratic-led Senate to adopt a budget plan. U.S. markets will be closed on Jan. 21 in observance of the Martin Luther King Jr. holiday.

Brazil’s Bovespa (IBOV) dropped 0.4 percent, trimming its weekly advance to 0.8 percent. Banco do Brasil fell 2.3 percent after saying it may increase its stake in Banco Votorantim SA, which reported five straight quarterly losses through September 2012.

The BSE India Sensitive Index (SENSEX), or Sensex, added 0.4 percent to the highest close since Jan. 6, 2011. Taiwan’s Taiex Index gained 1.5 percent, the most since Nov. 23. Benchmark gauges in the Philippines and Indonesia closed at record highs.

Russia’s Micex Index (INDEXCF) rose to its highest level since April as Sberbank, Russia’s largest lender, jumped 2.2 percent to the highest close since July 2011. OAO Magnit, the country’s biggest food retailer by market value, advanced 2.8 percent to a record close.

South Africa’s main stocks gauge increased for a second day as the FTSE/JSE Africa Mining Index jumped 1 percent, snapping five days of losses. African Rainbow Minerals Ltd., (ARI) a diversified mining company, added 1.1 percent.

Turkish Gains

Turkey’s ISE National 100 Index advanced for a sixth day, the longest rising streak since October, to reverse an earlier 0.8 percent decline. Turkcell Iletisim Hizmetleri AS (TCELL) slipped 2.4 percent, while Tupras Turkiye Petrol Rafinerileri A.S. fell 0.9 percent after an EFG Istanbul analyst said the company’s net income may decline due to narrowing margins.

A gauge of technology stocks jumped 1.1 percent to lead gains among the 10 industry groups in the MSCI Emerging Markets Index. (MXEF) All industry groups advanced. The broader index has added 2.4 percent this year, trailing a 3.7 percent increase by the MSCI World Index. (MXWO) The emerging-markets index trades for 11 times estimated profit, compared with the MSCI World’s multiple of 13.4, data compiled by Bloomberg show.

The Shanghai Stock Exchange Composite Index added 1.4 percent, rising for the first time in three days. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies advanced 2.1 percent to the highest level since August 2011.

Volumes Rise

Equity trading volumes were higher than average in Korea and India, with about 34 percent more shares of Kospi companies changing hands versus the 30-day average, according to data compiled by Bloomberg. Volumes were about 66 percent higher on the Sensex. The rupee posted its best week since October.

Anta Sports Products Ltd. (2020) gained 3.4 percent in Hong Kong to the highest level since March 16 after announcing a partnership with the Chinese Olympic Committee. Taiwan Semiconductor, the world’s largest contract chipmaker, climbed 2.2 percent. The company said first-quarter revenue will be NT$127 billion ($4.4 billion) to NT$129 billion, higher than estimates for NT$124 billion.

Fuel Prices

Bharat Petroleum surged 9.8 percent, making it the best performer on the MSCI Emerging Markets index. Indian Oil rallied 11 percent to the highest price since May 2011.

India’s move to raise fuel prices steps up efforts to curb fuel subsidies and narrow the widest budget deficit among the largest emerging nations. Refiners including Indian Oil are planning monthly increases in prices of the diesel, two people with direct knowledge of the matter said yesterday.

Wipro Ltd. (WPRO), the technology-services company controlled by billionaire Azim Premji, tumbled 7.7 percent in Mumbai, the worst performer on the MSCI Emerging Markets gauge, after reporting a decline in staff-utilization rates.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose three basis points, or 0.03 percentage point, to 264, according to JPMorgan Chase & Co.’s EMBI Global Index.

To contact the reporters on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net; Victoria Stilwell in New York at vstilwell1@bloomberg.net

To contact the editors responsible for this story: Darren Boey at dboey@bloomberg.net; Vernon Wessels at vwessels@bloomberg.net

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