Most Emerging-Market Stocks Advance as Ibovespa Rallies

Most emerging-market stocks rose as homebuilders pushed Brazil’s Ibovespa (IBOV) to a 16-week high. Samsung Electronics Co. led declines among technology shares.

The MSCI Emerging Markets Index advanced 0.1 percent to 1,002.44 as 411 stocks gained, while 341 retreated. Brazil’s Ibovespa rose for a third day and Turkey’s benchmark equity index rallied to a one-month high. Samsung, the world’s biggest smartphone maker, retreated 2.7 percent after BNP Paribas said the outlook for the consumer electronics business may worsen. The Shanghai Composite Index slumped 2.1 percent after data on China’s foreign investment trailed economists’ estimates.

The MSCI measure for developing-nation stocks swung between gains and losses today, after rallying to a three-month high yesterday, as Federal Reserve policy makers gathered. The Federal Open Market Committee meets today and tomorrow, when members are forecast to cut monthly bond buying by $10 billion to $75 billion, according to a Bloomberg survey of economists.

“No one is going to want to commit a huge amount of money to the market before seeing the results of the Fed meeting tomorrow,” Paul Zemsky, the New York-based head of asset allocation at ING Investment Management which oversees $180 billion, said in a phone interview.

Seven out of 10 groups in the MSCI Emerging Markets Index rose today as utility and phone companies had the biggest gains. The broad measure has dropped 5 percent so far this year to trade at 10.6 times projected earnings, according to data compiled by Bloomberg. That trails the valuation of 14 for the MSCI World Index.

Emerging ETF

The iShares MSCI Emerging Markets Index exchange-traded fund, the developing-nation ETF, fell 0.2 percent to $41.53. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a gauge of options prices on the fund and expectations of price swings, slipped 0.4 percent to 24.26.

The Ibovespa rose 0.8 percent as Rossi Residencial SA paced a rally in homebuilders after traders pared bets on Brazilian interest-rate increases. The real climbed for the first time in three days as the central bank rolled over foreign-exchange swap contracts worth $1.97 billion to support the currency in an effort to curb inflation.

The Micex Index rose to the highest in six months in Moscow as OAO RusHydro, Russia’s biggest renewable energy producer, jumped 2.7 percent. The Borsa Istanbul National 100 Index extended this month’s rally to 13 percent, while Poland’s WIG20 Index snapped a two-day decline.

China, India

The Shanghai Composite Index fell the most since July 8 as Shanghai Pudong Development Bank Co. and Poly Real Estate Group Co. (600048) led declines for lenders and developers. Shanghai International Port (Group) Co. dropped 10 percent after UBS AG downgraded the stock to sell.

Samsung sank the most in two months, extending this year’s decline to 8.9 percent. South Korea’s Kospi Index fell 0.4 percent, dropping for the second time in three days.

Indian equities advanced, led by software exporters and consumer companies. Tata Consultancy Services Ltd. (TCS), the nation’s top software services company, gained the most in two weeks. The rupee slid 0.8 percent, according to prices from local banks compiled by Bloomberg.

The premium investors demand to own emerging-market debt over U.S. Treasuries fell one basis point, or 0.01 percentage point, to 331 basis points, according to JPMorgan Chase & Co.

To contact the reporters on this story: Julia Leite in New York at jleite3@bloomberg.net; Maria Levitov in London at mlevitov@bloomberg.net; Sharon Cho in Seoul at ccho28@bloomberg.net

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

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