Emerging-market stocks capped the biggest weekly advance in nine months and bond yields slumped as China’s cash crunch eased. India’s rupee rose the most since September, extending its rebound from a record low.
The MSCI Emerging Markets Index rose 2.3 percent to 940.33, extending its rally for the week to 4.4 percent. Industrial & Commercial Bank of China Ltd. and PetroChina Co. (601857), which have the two biggest weightings on the Shanghai Composite Index (SHCOMP), gained the most since 2010. India’s rupee added 1.4 percent, while the nation’s bonds jumped the most in a year. The premium investors demand to own emerging-market debt over U.S. Treasuries slid for a fourth straight day, according to JPMorgan Chase & Co.
China’s money-market rates fell and speculation grew that the government will ease financing for developers to alleviate a credit crunch. Central bank governor Zhou Xiaochuan said the nation will maintain market stability, his first comment since a record cash crunch that spurred concern growth will ease.
“The emerging-markets group was oversold, so you expect a bounce back,” Timothy Ghriskey, the chief investment officer at Solaris Group LLC in New York, which manages over $1.5 billion, said by phone. “There’s also been a number of positive comments in China. They appear to have dealt with the short-term liquidity squeeze and stabilize that situation very quickly and very proactively.”
All 10 groups in the MSCI Emerging Markets Index rose today led by health-care and telephone shares. The broad measure has slumped 9.1 percent since the end of March, its second quarterly drop, after Federal Reserve Chairman Ben S. Bernanke on June 19 outlined the conditions that would prompt the Fed to reduce and eventually end $85 billion in monthly asset purchases.
The iShares MSCI Emerging Markets Index exchange-traded fund rose 0.6 percent to $38.50. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, slid 2.4 percent to 27.61.
Mexico’s IPC index rose the most among major stock benchmarks in the Americas today, capping its biggest weekly advance since 2009 after plunging on June 20 to a one-year low.
Brazil’s Ibovespa snapped a three-day gain as B2W Cia. Digital led retailers lower amid concern a weaker currency will stoke inflation and derail Brazil’s economic recovery. The real slid on concern President Dilma Rousseff’s attempt to placate street protesters will widen the government’s budget deficit.
The Micex Index added 1.3 percent in Moscow, trimming its quarterly drop to 7.5 percent. OAO Lukoil gained, while United Co. Rusal, the world’s largest aluminum producer, slumped.
Poland’s WIG20 Index surged 3.2 percent led by coal miner Jastrzebska Spolka Weglowa SA. Benchmark gauges in Hungary and the Czech Republic added at least 0.7 percent. Turkish stocks rallied, while the lira weakened as the nation’s trade gap widened from last year and the central bank raised the amount of funding offered at one-week repo auctions at its lowest rate.
The Shanghai Composite Index climbed 1.5 percent, paring losses to 4.5 percent this week. The gauge erased gains in the afternoon before rebounding in the last 15 minutes of trading, fueled by rallies for ICBC (601398), the nation’s biggest lender, and PetroChina, the largest energy company. The Hang Seng China Enterprises Index climbed 1.7 percent.
Reliance Industries Ltd. (RIL) and Oil & Natural Gas Corp. (ONGC), India’s biggest energy explorers, led Indian stocks higher as the nation’s cabinet agreed to lift the price of natural gas. The rupee posted the biggest quarterly drop since 2011.
The Jakarta Composite Index (JCI) surged 3.1 percent, while the Taiex index climbed 2.3 percent. Taiwan Semiconductor Manufacturing Co., which has the biggest weighting on the gauge, rose 6.2 percent.
The extra yield for emerging-market debt over U.S. Treasuries declined seven basis points, or 0.07 percentage point, to 341 basis points, according to JPMorgan’s EMBI Global Diversified Index.