Emerging-market stocks rose, led by Philippine companies, on speculation falling deposit rates will spur demand for the nation’s equities. Hungarian equities tumbled to the lowest level in about a month.
Ayala Corp. (AC) jumped 5.4 percent in Manila, helping drive the Philippine Stock Exchange Index to a record. Erste Group Bank AG led the Czech PX index higher. Harmony Gold Mining Co. (HAR), Africa’s third-largest producer of the metal, climbed a second day as gold extended its rebound. Billionaire Eike Batista’s OGX Petroleo & Gas Participacoes SA surged 18 percent in Sao Paulo, sending Brazil’s Bovespa index up a third day.
The MSCI Emerging Markets Index (MXEF) rose 0.1 percent to 1,011.96 in New York as 436 stocks gained, while 342 retreated. The Philippine peso halted a three-day gain on speculation the central bank will lower the interest rate on its special deposit accounts for a third time this year. Earlier today, stocks fell after a drop in American home sales.
“A cut in SDA rates will entice people to look for other investment havens offering higher yields, such as the equities market,” Jonathan Ravelas, chief market strategist at BDO Unibank Inc. in Manila, said by phone.
Consumer discretionary and technology shares led the gains in the MSCI Emerging Markets Index. The emerging-markets index has lost 4.1 percent this year, trailing a 6.6 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 13.9 valuation, according to data compiled by Bloomberg.
The iShares MSCI Emerging Markets Index exchange-traded fund rose 0.5 percent to $41.84. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, lost 5 percent to 19.68.
The Bovespa index rose 0.7 percent, rebounding from earlier losses. OGX extended a three-day rally to 29 percent after Folha de S. Paulo newspaper reported that Moscow-based Lukoil may buy a 40 percent stake. The company said in an e-mailed statement to Bloomberg News that Folha’s report is “groundless.”
Russian stocks retreated, erasing earlier gains, as OAO Gazprom slid after JPMorgan Chase & Co. cited the natural gas export monopoly’s dividend plans in a report downgrading the country’s equities.
The Budapest Stock Exchange Index slumped 1.4 percent as the nation’s largest refiner Mol Nyrt. Latvia’s OMX Riga index had the biggest decline among the 94 primary gauges tracked by Bloomberg.
Hong Kong stocks rose for a second day as infrastructure- related stocks climbed on speculation demand will increase following an earthquake in China’s southwestern province of Sichuan. The Hang Seng China Enterprises Index (HSCEI) added less than 0.1 percent, while the Shanghai Composite Index declined 0.1 percent.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries lost one basis point, or 0.01 percentage point, to 295 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.