Emerging Stocks Rise as China Data Lifts Gold Producers

Emerging-market stocks rose to a two-week high as confidence in China’s economy grew and gold producers lifted South Africa’s benchmark gauge to a record.

The MSCI Emerging Markets Index added 0.7 percent to 957.82, the highest level since July 26. The FTSE/JSE Africa All Shares Index climbed 1.8 percent as Harmony Gold Mining Co. (HAR) rallied the most since 2008 amid a jump in the precious metal. Mining company Vale SA helped drive Brazil’s Ibovespa to the highest level in two months. Mexico’s peso reversed an earlier advance after President Enrique Pena Nietounveiled his plan to boost private investment in the state-controlled oil industry.

Raw-material companies in the emerging-market measure increased 1.8 percent to lead gains among 10 groups. China’s yuan halted a two-day decline on optimism the world’s second-largest economy is stabilizing after data released last week showed rebounding exports and manufacturing. The nation’s developers gained as speculation grew that the government will relax a ban on companies raising funds through share sales.

“There’s a general sense that the global deceleration has abated,” Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co., said in a phone interview. His firm oversees about $130 billion. “That, coupled with economic data points that point to stabilization within China, has put a floor under valuations.”

A three-day rally in the MSCI Emerging Markets Index trimmed this year’s slump to 9.2 percent, compared with a 14 percent surge in the MSCI World Index. The broad measure of developing nations is trading at 10.1 times estimated earnings, below the valuation of developed markets of 13.8.

Emerging ETF

The iShares MSCI Emerging Markets Index exchange-traded fund added 0.9 percent to $39.73. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, retreated 4.7 percent to 21.74.

The Ibovespa rose the most among major equity gauges in the Americas after Vale rallied for a fourth day. Oil company Petroleo Brasileiro SA reversed earlier gains that were driven by better-than-estimated earnings. The real retreated 0.7 percent, snapping a two-day advance.

Mexico’s IPC index slid 1.2 percent, led by Alfa SAB (ALFAA), which controls the nation’s largest publicly-traded petrochemical company. The peso depreciated 0.5 percent.

South Africa

The FTSE/JSE Africa All-Share Index advanced to the highest level since at least 1995 (JALSH), led by Harmony, which soared 21 percent. Gold capped the longest rally in four weeks.

Russia’s Micex Index (INDEXCF) rose a second day, led by OAO RusHydro. Benchmark gauges in Turkey and Poland added more than 1 percent, while stocks in Hungary were little changed.

The Shanghai Composite Index advanced 2.4 percent, the most since July 11. China Shenhua Energy Co., the nation’s biggest coal producer, rallied 6.1 percent and Jiangxi Copper Co. (358), the largest copper producer, had its biggest gain in a month. Poly Real Estate Group Co. soared 5 percent.

Indian stocks climbed as Sun Pharmaceutical Industries Ltd. (SUNP), India’s biggest drugmaker, jumped after posting a 56 percent gain in net income before a one-time charge. The rupee weakened 0.7 percent per dollar.

The premium investors demand to own emerging-market debt over U.S. Treasuries slid 0.06 percentage point to 323 basis points, according to JPMorgan Chase & Co.

To contact the reporters on this story: Maria Levitov in London at mlevitov@bloomberg.net; Julia Leite in New York at jleite3@bloomberg.net; Jessica Summers in New York at jsummers17@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net

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