Emerging-market stocks advanced for a third day, led by technology companies, after a report showed that Chinese service industries increased for the first time since March. Brazil’s real led declines in currencies.
The MSCI Emerging Markets Index gained 0.1 percent to 956.40, following the first weekly retreat in a month. The Shanghai Composite Index posted the longest rally since May as retailers jumped, while HTC Corp. (2498) surged the most in more than 20 months in Taipei on plans to buy back shares. Brazil’s Ibovespa (IBOV) fell as online seller B2W Cia. Digital tumbled and the nation’s real paced losses among half of the 24 developing-nation currencies tracked by Bloomberg.
Stocks advanced as official data showed China’s non-manufacturing Purchasing Managers’ Index rose to 54.1 in July from 53.9 in June. The gauge hasn’t dropped below 50, the dividing line between expansion and contraction, since a new data series started in March 2011. The measure of developing-nations trimmed this year’s decline to 9.4 percent, compared with a 14 percent increase in the MSCI World Index.
“China is the big driver and has been for quite some time,” Peter Jankovskis, who helps oversee $3 billion as co-chief investment officer of Lisle, Illinois-based Oakbrook Investments LLC, said in telephone interview. “The PMI number is encouraging.”
A measure of technology shares in the MSCI Emerging Markets Index added 0.8 percent, while consumer-staple and financial companies retreated. The iShares MSCI Emerging Markets Index exchange-traded fund lost 0.6 percent to $39.46. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, dropped 1.9 percent to 20.45.
Brazil’s Ibovespa slid 0.1 percent as B2W led losses among retailers. The real extended this year’s slump to 11 percent. Mexico’s IPC index snapped a three-day rally as construction company Empresas ICA SAB retreated.
The Micex Index (INDEXCF) was little changed in Moscow after slumping for two weeks. OAO Uralkali tumbled as the potash producer’s suspension of a venture that controlled almost half of global exports prompted Bank of America Merrill Lynch to cut the stock to sell. Turkey and Poland’s shares gained.
China’s stocks rose for a fifth day as Shanghai Friendship Group Inc. paced a rally for retailers. HTC rebounded from its lowest level in almost eight years in Taipei, while South Korea’s won rose the most in three weeks.
Indian stocks climbed as investors speculated the eight-day decline in the benchmark index was excessive. Sterlite Industries (India) Ltd., the nation’s biggest copper producer, jumped 4.5 percent. Tata Consultancy Services Ltd. gained for the second day.
Zimbabwe’s main stock index plunged 11 percent, its biggest one-day decline since 2009, after President Robert Mugabe won a presidential election to extend his 33 years in power and his main rival refused to accept the result.
The premium investors demand to own emerging-market debt over U.S. Treasuries slid 0.05 percentage point to 322 basis points, according to JPMorgan Chase & Co.
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