Emerging Stocks Rise on Technology Rally as Brazil Falls

Emerging stocks rose a third day, led by technology companies, as a drop in U.S. jobless claims sparked optimism about the global economy. Brazil’s Bovespa index tumbled the most among the world’s major equity gauges.

Taiwan Semiconductor Manufacturing Co. (2330), the largest contract producer of chips, jumped the most in more than four months in Taipei. Turkish stocks climbed and bond yields fell as Moody’s Investors Service said a peace agreement with Kurdish militants would enhance the country’s creditworthiness. Brazil’s Bovespa slumped 1.4 percent, snapping a four-day rally, after a disappointing retail sales report. Phone carrier Oi SA tumbled to the lowest price since 1999 in Sao Paulo.

The MSCI Emerging Markets Index rose 0.5 percent to 1,029.22 in New York, adding 2.2 percent in three days. Stocks gained as data showed applications for unemployment benefits in the U.S. fell more than forecast last week, easing concern the labor market was taking a turn for the worse.

The jobless claims number “is giving people a lot of comfort that the U.S. economy won’t experience a second quarter slowdown,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management which oversees $170 billion, said by phone. “The news flow has been more positive. You’re seeing risk-taking happening across the globe.”

A measure of technology shares in the MSCI Emerging Markets Index (MXEF) added 1.8 percent today. The emerging-markets gauge slipped 2.5 percent this year, trailing an 9.3 percent increase in the MSCI World Index (MXWO) of developed-country stocks. The emerging-markets measure trades at 10.7 times 12-month projected profit, compared with the MSCI World’s multiple of 14.2, according to data compiled by Bloomberg.

Emerging ETF

The iShares MSCI Emerging Markets Index exchange-traded fund rose 0.1 percent to $42.53. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, dropped 2.5 percent to 17.23.

The Bovespa index fell the most in dollar terms among 94 major global stock measures tracked by Bloomberg as a report showing retail sales unexpectedly dropped in February rekindled concern that Brazil’s economic recovery will falter. Oi slumped 4.4 percent to the lowest since April 1999.

The Mexican IPC Index gained 0.1 percent. Desarrolladora Homex SAB, the nation’s biggest homebuilder by sales, tumbled to the lowest on record as the announcement of a bridge loan today added to speculation that it’s strapped for cash.

Turkish stocks rose for the first time in three days after the statement was released, while benchmark sovereign bond yields continued their rally for a second day and the lira gained. The nation’s Borsa Istanbul National 100 Index jumped 2.1 percent, the most in a month.

Russian Shares

Russian shares tumbled to a November low, falling 10 percent from the highest level this year, as OAO Gazprom slumped and crude oil, the country’s main export earner, sank. The Micex Index retreated 1.7 percent.

Taiwan’s Taiex Index (TWSE) surged 1.4 percent, its steepest advance since Jan. 18. The Hang Seng China Enterprises Index (HSCEI) in Hong Kong rose 0.1 percent, while the Shanghai Composite Index of domestic shares fell 0.3 percent. Thailand’s SET Index rose 1.8 percent. Taiwan Semiconductor advanced 3.3 percent, the most since November. Airports of Thailand Pcl. jumped 7.1 percent, the most on the emerging-markets gauge.

South Korea’s bonds fell, spurring the biggest increase in five-year yields since May 2009, after the central bank unexpectedly refrained from cutting borrowing costs. The won rose the most in more than two weeks.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell one basis point, or 0.01 percentage point, to 281 basis points, 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: Emma O’Brien at eobrien6@bloomberg.net

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