Emerging-market stocks rose, with the benchmark index heading for the biggest weekly advance in almost two months, as shares in India gained and South Korean automakers rallied.
Hyundai Motor Co. (005380) jumped to an 11-month high after reaching a preliminary agreement with its South Korean union to end a strike. India’s S&P BSE Sensex added 1.1 percent as the rupee strengthened 0.4 percent against the dollar. China Cosco Holdings Co. climbed to the highest level since March in Hong Kong on higher freight rates. The ringgit and rupiah slid at least 0.5 percent before U.S. jobs data that may bolster the case for the Federal Reserve to reduce stimulus.
The MSCI Emerging Markets Index added 0.2 percent to 949.15 as of 2:35 p.m. in Hong Kong. The gauge has gained 2.1 percent this week on signs the global economy is improving. Employers probably picked up the pace of hiring in August and the U.S. jobless rate held at a more than four-year low, economists said before a report today. Emerging-market leaders at the Group of 20 summit in Russia cautioned that cuts to developed-nation stimulus could stoke global volatility.
“We anticipate some volatility because we got confirmation of U.S. tapering to come, the still smoldering euro crisis and geopolitical events in the Middle East,” Kevin Gardiner, head of investment strategy for Barclays Plc’s wealth management unit, told Bloomberg TV India. “We are confident that U.S. monthly numbers will continue to improve, the Chinese economy will not hard land and the global economy continues to go forward.”
China’s customs office is scheduled to release August data for imports and exports on Sept. 8. Overseas shipments are expected to have gained 5.5 percent from a year ago, compared with a 5.1 percent advance in July, according to the average estimate from 36 economists surveyed by Bloomberg.
The MSCI Emerging Markets Index has lost 10 percent this year, compared with a 12 percent gain in the MSCI World Index. The developing-nation index trades at 10 times projected 12-month earnings, trailing the MSCI World’s 13.6 times, data compiled by Bloomberg show.
A gauge of consumer discretionary companies in the developing-nation gauge rose 0.7 percent, the most among 10 industry groups. Hyundai Motor rose 2.7 percent, its second day of gains. The company reached a preliminary agreement with its South Korean union to raise wages, paving the way for the end of a strike that’s resulted in an estimated 1 trillion won ($910 million) in lost output.
Affiliate Kia Motors Corp. surged 3 percent to the highest level since October 18. South Korea’s Kospi Index added 0.2 percent to the highest level since June 5, while the won strengthened 0.5 percent.
The Sensex headed for the highest level since Aug. 14 as banks gained. ICICI Bank Ltd., India’s biggest private lender by assets, rose to a six-week high in Mumbai. Engineering company Larsen & Toubro Ltd. advanced to a one-week high.
The Shanghai Composite Index advanced 0.7 percent, poised for the highest close since June 19, as shippers and airlines rallied before trade data this weekend. Cosco Shipping Co. jumped 10 percent in Shanghai.
China Cosco, the nation’s biggest shipping company, rallied 1 percent, its fourth day of gains. The Baltic Dry Index of commodity freight prices rose 5.3 percent yesterday to its highest level since January 2012.
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong was little changed. Thailand’s SET Index gained 0.9 percent, snapping a two-day slump. The S&P BSE Sensex of Indian shares climbed 0.8 percent, while Taiwan’s Taiex Index lost 0.1 percent.
The Jakarta Composite index fell 0.4 percent, its third day of declines. Investors are expecting Bank Indonesia (BMRI) to raise benchmark interest rates by as much as 50 basis points over the next two board meetings, adding pressure to banks’ earnings and margins, Syaiful Adrian, an analyst at Ciptadana Securities, said by phone today.
The rupiah led a decline in Asian currencies this week on concern signs of a U.S. economic recovery will support the case for a reduction in stimulus that has fueled emerging-market inflows. The yield on Indonesia’s sovereign bonds due May 2023 climbed 46 basis points this week to 8.87 percent, the highest since February 2011, according to prices from the Inter Dealer Market Association.
The ringgit weakened 0.6 percent after data today showed imports surged more than exports in July, narrowing Malaysia’s trade surplus to the least since April.
Malaysia’s default risk climbed above that of the Philippines for the first time as Prime Minister Najib Razak seeks to avoid a debt-rating cut, while his counterpart pitches for upgrades.
To contact the reporter on this story: Santanu Chakraborty in Mumbai at firstname.lastname@example.org