Emerging-market stocks had the biggest one-day advance since January as Chinese equities surged on prospects the government will act to ignite economic growth and commodity stocks drove gains in Brazil.
Taiwan Semiconductor Manufacturing Co. (2330), the world’s largest contract maker of chips, rose 6.6 percent in Taipei, after forecasting record quarterly sales. China’s yuan had the biggest weekly jump in six months as the central bank signaled plans to widen a trading band that’s been limiting appreciation since October. Gold producers surged in South Africa, while Petroleo Brasileiro SA paced gains in Brazil’s Bovespa index.
The MSCI Emerging Markets Index added 1.4 percent to 1,011.17 in New York, paring a weekly loss to 0.8 percent. China’s economy, which unexpectedly slowed in the first three months of this year, may rebound in the second and third quarters, said Zhu Baoliang, head of the State Information Center’s economic forecast department.
“Chinese growth may not be quite as bad as everybody thinks,” Walter ‘Bucky’ Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama, said in a telephone interview. “And we’ve seen commodities bounce back a little today.”
Nine out of 10 groups in the MSCI Emerging Markets Index (MXEF) rose, led by technology and financial shares. The emerging- markets index has lost 4.2 percent this year, trailing a 6.3 percent increase in the MSCI World Index of developed-country stocks. The emerging-markets measure trades at 10.6 times 12- month projected profit, compared with the MSCI World’s 13.8 valuation, according to data compiled by Bloomberg.
The iShares MSCI Emerging Markets Index exchange-traded fund rose 1.5 percent to $41.64. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, lost 11 percent to 20.71.
Brazil’s Bovespa index rose 1.4 percent, trimming this week’s decline to 1.9 percent, as traders pared expectations for interest-rate increases by the central bank. Petrobras, as the state-run oil company is known, climbed 3.7 percent.
The Mexican IPC Index gained 0.8 percent. Desarrolladora Homex SAB surged 40 percent as the Mexican homebuilder seeking to avoid a debt restructuring agreed to sell its stake in two prisons to companies controlled by billionaire Carlos Slim.
Standard & Poor’s revised its outlook on Venezuela to negative from stable, the ratings company said today. Britain lost its top credit grade at Fitch Ratings, which cited a weaker economic and fiscal outlook.
Russian stocks rose for the first time in seven days, paring their weekly decline, as crude gained and a technical indicator signaled the index is oversold. The Micex Index added 0.2 percent, cutting its fifth weekly drop to 3.4 percent. Oil producer OAO Bashneft’s preferred shares rose 4.1 percent. Benchmark indexes in Hungary, Turkey and Poland gained.
South African miners rallied after a recovery in gold prices. The FTSE/JSE Africa All-Share Index climbed 1.5 percent in Johannesburg, with Harmony Gold Mining Co. (HAR) and AngloGold Ashanti Ltd. (ANG) adding at least 5.2 percent.
The Shanghai Composite Index climbed 2.1 percent, the most since March 20. Chinese stocks extended gains today after the Shanghai Securities News reported that regulators are studying plans that would allow A shares to be added to international “well-known” indexes to lure overseas funds. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong jumped 3.1 percent, snapping a five-day slump.
Lenovo Group Ltd. (992) surged 9.5 percent in Hong Kong, the most since September 2011. The Chinese personal-computer maker, is the most likely bidder for parts of International Business Machines Corp.’s server division, a person familiar with the matter said.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries slid four basis points, or 0.04 percentage point, to 294 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.