Most Emerging-Market Stocks Rise on Bond Buying Outlook

Most emerging-market stocks advanced as a Federal Reserve official said bond purchases should continue, bolstering the outlook for global economic growth. Mexico’s IPC Index slumped to an eight-month low.

Brazil’s Ibovespa (IBOV) advanced for a third session as Centrais Eletricas Brasileiras SA led gains by electrical utilities. Russian shares rebounded after metal producers gained, while South African equities rose to a record as media company Naspers (NPN) Plc surged. Industrial & Commercial Bank of China Ltd. (601398) tumbled the most in six weeks as a person familiar said Goldman Sachs Group Inc. sold its $1.1 billion investment in the lender.

The MSCI Emerging Markets Index was little changed at 1,048.13, as 411 shares gained, while 344 fell. Stocks rebounded after Federal Reserve Bank of St. Louis President James Bullard said the central bank should continue its quantitative easing program known as QE because it’s the best available option for policy makers to boost growth that is slower than expected.

“There’s been a lot of chatter about what’s going to happen with QE,” Jeff Papp, a senior analyst at Oberweis Asset Management Inc., which manages about $700 million of investments, said by phone from Lisle, Illinois. “So anytime you hear enforcement that it’s going to stay, you’re going to see equities do well.”

Industrial shares in the developing-nation measure rose, while financial stocks retreated. The broad index has lost 0.7 percent this year, compared with a 14 percent increase in the MSCI World Index.

Emerging ETF

The iShares MSCI Emerging Markets Index exchange-traded fund fell 0.2 percent to $43.44. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, dropped 2.8 percent to 17.49.

The Ibovespa gained 1 percent to a two-week high as Eletrobras climbed 7 percent. Mexico’s IPC Index had the biggest decline among major emerging-market indexes, dropping 1.3 percent. ICA (ICA*) tumbled to the lowest price since November.

Russia’s Micex Index extended a three-day advance to 3.6 percent. OAO Mechel, the nation’s biggest coking coal producer, increased 2.7 percent, while OAO Novolipetsk Steel added 4.3 percent. OAO Rostelecom, the nation’s state-run phone company, retreated after profit fell.

Biggest Decline

Grupa Azoty SA, Poland’s biggest chemical producer, led declines in the MSCI Emerging Markets Index after climbing 33 percent in eight days.

The FTSE/JSE Africa All-Share Index jumped 1.8 percent to the highest level since at least 1995, according to data compiled by Bloomberg. Naspers, Africa’s largest media group, jumped 3.8 percent.

The rand declined for a ninth day, weakening to a four-year low, as violent protests at a South African chrome mine renewed concern that labor disruptions will cut mining output and slow economic growth.

The Hang Seng China Enterprises Index of mainland companies lost 0.9 percent, the Shanghai Composite Index gained 0.2 percent. ICBC fell 2.1 percent. Cosco Pacific Ltd. (1199), the container-terminal arm of China’s largest shipping group, gained 4.1 percent after agreeing to sell a $1.2 billion asset. GCL-Poly Energy Holdings Ltd. (3800) rose 9 percent on a report the U.S. is in talks with the European Union and China to settle a dispute over the trade of solar-energy equipment.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries added three basis points, or 0.03 percentage point, to 272 basis points, according to JPMorgan Chase & Co.’s EMBI Global Diversified Index.

To contact the reporters on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net; Julia Leite in New York at jleite3@bloomberg.net

To contact the editor responsible for this story: Laura Zelenko at lzelenko@bloomberg.net

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