Emerging-market stocks rose and pared a fifth weekly decline, led by Turkey and Thailand, after valuations tumbled to a 10-month low. Brazil’s real posted the biggest drop among developing currencies.
The Borsa Istanbul Stock Exchange National 100 Index rallied 4.6 percent after Prime Minister Recep Tayyip Erdogan met with protesters. Thai’s benchmark index capped the biggest advance since 2011, led by banks, while Russia’s Micex index snapped a three-day drop. Chinese shares in Hong Kong slid for a record 12th day as the nation’s Finance Ministry failed to sell all of the debt offered at an auction. Brazil’s Ibovespa (IBOV) slumped and the real fell on higher-than-forecast inflation.
The MSCI Emerging Markets Index rose 1.1 percent to 953.68, trimming its weekly slump to 2.8 percent. The gauge rebounded after trading yesterday at 9.7 times projected earnings, the lowest level since August, according to data compiled by Bloomberg. Stocks gained even after the International Monetary Fund cut its American growth forecast for 2014 and warned that tapering of Federal Reserve stimulus may be risky if not handled properly.
“Emerging markets are at a pretty big discount,” James Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees more than $340 billion, said by phone. “I do think there’s good value and good possibilities over the next couple of years.”
All 10 groups in the emerging-market index rose today as consumer shares had the biggest gains. The broad measure has lost 9.6 percent this year, compared with a 9.4 percent advance in the MSCI World Index of developed-country stocks.
The iShares MSCI Emerging Markets Index exchange-traded fund slumped 1.6 percent to $39.31. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, surged 3.5 percent to 26.97.
Brazil’s Ibovespa fell 2.1 percent as inflation data rekindled concern that policy makers will maintain the faster pace of interest rate increases established at their last meeting. OGX Petroleo & Gas Participacoes SA plunged 7.6 percent, leading a slump in companies controlled by billionaire Eike Batista. The real declined 1.4 percent against the U.S. dollar as the removal of a tax also failed to stem outflows.
The Micex Index added 1.4 percent in Moscow, paring its fifth weekly loss to 3.3 percent. OAO Magnit, Russia’s biggest food retailer, surged 3.8 percent. The ruble advanced as oil rose and demand for the currency from exporters with tax payments falling due added to buying from foreign investors amid improved risk appetite.
Turkey’s equity benchmark rallied as Turkiye Garanti Bankasi AS and Akbank TAS (AKBNK) advanced at least 5.4 percent. The lira gained for the fourth day.
Thailand’s SET Index rebounded from the lowest level since December. Kasikornbank Pcl (KBANK) posted the biggest advance since 2006. India’s S&P BSE Sensex rebounded 1.9 percent as ICICI Bank Ltd. rose the most in a month, leading its peers higher. The rupee, which touched an all-time low of 58.9850 per dollar on June 11, rose to 57.5287.
The Hang Seng China Enterprises Index, also known as the H-Share Index, slid 0.2 percent, erasing gains of as much as 1.3 percent. The measure has fallen 21 percent from its Feb. 1 high, exceeding the 20 percent threshold that some investors consider as a bear market. The Shanghai Composite Index (SHCOMP) added 0.6 percent, halting an eight-day, 7.6 percent loss.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell three basis points, or 0.03 percentage point, to 322 basis points, according to JPMorgan Chase & Co.’s EMBI Global Diversified Index.