Emerging-market stocks rose after a report showed that a gauge of Chinese manufacturing increased to a six-month high. Technology companies climbed, led by Apple Inc. (AAPL)’s suppliers, amid optimism over new iPhone sales.
The MSCI Emerging Markets Index added 0.3 percent to 1,016.30, extending a three-week gain. The Shanghai Composite Index advanced 1.3 percent as GoerTek Inc. (002241), an Apple supplier, surged the most in a month. Brazil’s Ibovespa (IBOV) snapped a two-day slide as Banco Santander Brasil SA led gains in financial stocks after Citigroup Inc. said it’s “bullish” on the country’s banks. Indonesia’s rupiah paced losses in currencies on speculation local companies are boosting dollar purchases.
Stocks advanced amid optimism that China’s economic growth is picking up, boosting Premier Li Keqiang’s odds of meeting the year’s 7.5 percent expansion goal. The preliminary reading of 51.2 for a Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics compared with a 50.9 median estimate from 14 economists surveyed by Bloomberg News.
“The number was very good, much better than expected,” Paul Christopher, the St. Louis-based chief international strategist at Wells Fargo Advisors, said in an interview at Bloomberg’s headquarters in New York. His firm oversees about $1.3 trillion. “We had been expecting China to do better in the second half, and that’s coming true.”
Technology and consumer discretionary shares led gains among the 10 industries in the MSCI Emerging Markets Index. The measure for developing markets trimmed this year’s decline to 3.7 percent, trading at 10.7 times projected earnings, according to data compiled by Bloomberg. That trails the 14 valuation of the MSCI World Index.
The iShares MSCI Emerging Markets Index exchange-traded fund advanced 0.4 percent to $42.23. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, slipped 2 percent to 23.09.
Brazil’s Ibovespa gained as Santander added 2.9 percent. The benchmark gauge will reach 60,000 by the end of the year and to 64,000 in 2014, boosted by the U.S. Federal Reserve’s decision to delay tapering of its bond-buying program and by better-than-forecast economic data in Brazil, Citigroup analysts wrote in a report.
Russian stocks declined for a second day as JPMorgan Chase & Co. reduced the nation’s equities to the equivalent of sell on declining crude prices. OAO Rosneft, Russia’s biggest oil producer, dropped 1.3 percent. JPMorgan upgraded equities in Turkey, Peru and South Africa, saying the Fed’s decision to keep monetary stimulus intact would spur emerging-market stocks for the rest of the year.
“The Fed is allowing investors to ‘temporarily’ relive the happy days of QE-driven EM bonds and equities,” JPMorgan said in the report. “The switch to bullish EM equities was built on bearish positioning and improving cyclical data in EM.”
Chinese shares climbed the most in two weeks as the bourse resumed trading after a two-day holiday last week. GoerTek jumped 6.2 percent, the most since Aug. 8. Apple sold 9 million iPhones in the weekend debut of two new models, almost double the previous record, and predicted that quarterly revenue would be at the high end of its previously projected range.
The Taiex Index rallied to the highest level since May 29, led by Taiwan Semiconductor Manufacturing Co.
Indian (SENSEX) stocks posted the biggest two-day loss in a month on concern the central bank may take more steps to quell inflation after unexpectedly increased borrowing costs last week. State Bank of India plunged 5.3 percent, sending the S&P BSE Bankex to its biggest retreat in three weeks.
Indonesia’s rupiah fell the most in more than a week amid speculation local companies are boosting dollar purchases to meet month-end debt and import payments.
The premium investors demand to own emerging-market debt over U.S. Treasuries rose two basis points, or 0.02 percentage point, to 317 basis points, according to JPMorgan Chase & Co.
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