Emerging-market stocks advanced to a four-month high, led by technology companies, after Infosys (INFO) Ltd. raised its revenue forecast while optimism grew that U.S. lawmakers are moving toward avoiding a nation’s default.
The MSCI Emerging Markets Index rose 0.9 percent to 1,023.21, extending its advance for the week to 1.5 percent. Infosys surged to the highest in 30 months in Mumbai. The benchmark gauge for Chinese stocks jumped 1.7 percent after the Shanghai Securities News reported the city may reform state-owned enterprises, while Vale SA led gains in Brazil’s Ibovespa. Indonesia’s rupiah had its best week since January 2012.
Stocks in developing nations extended a two-day advance to 1.7 percent on expectations President Barack Obama and House Republican leaders are moving toward a deal to extend the nation’s borrowing authority as they remained at odds over terms for ending the partial government shutdown. House Republicans offered a plan to raise the U.S. debt limit that would require the president to accept policy conditions attached to a spending measure, according to two congressional aides.
“This is a relief rally related to the news from the U.S. that we could be close to a temporary extension for the debt ceiling,” Michael Wang, an emerging-markets strategist at Amiya Capital LLP in London, said by e-mail. “It could continue next week if we get further signs that we are close to an agreement between the White House and republicans.”
All 10 groups in the MSCI Emerging Markets Index gained today as a measure of technology shares surged to a 13-year high. The benchmark gauge for developing nations has dropped 3 percent this year to trade at 10.7 times projected earnings, compared with the valuation of 13.9 for the MSCI World Index, according to data compiled by Bloomberg.
The iShares MSCI Emerging Markets Index exchange-traded fund rose 0.4 percent to $42.83. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, decreased 5 percent to 23.73.
Brazil’s Ibovespa rose for a third day amid signs of growth in China, the Latin American country’s top trading partner. Vale SA, the world’s largest iron-ore producer, climbed the most in one month.
Russian stocks dropped from the highest since February as crude oil retreated and OAO Magnit, Russia’s largest retailer, slumped. TVN SA, Poland’s second-biggest television network, jumped to a two-year high as Deutsche Bank AG recommended buying its shares, citing prospects for a rebound in the domestic ad market.
India’s S&P BSE Sensex (SENSEX) rallied 1.3 percent to a three-week high as Infosys, which has the second-highest weighting in the gauge, surged 4.7 percent. Tata Consultancy Services Ltd. (TCS), HCL Technologies Ltd. (HCLT) and Tata Motors Ltd. climbed to a record. ICICI Bank Ltd. (ICICIBC) rallied 5.2 percent. The rupee rose to the highest level in almost two months.
The Shanghai Composite Index (SHCOMP) capped the steepest weekly gain in a month. Shanghai No. 1 Pharmacy Co. (600833) rallied 10 percent. SAIC Motor Corp., China’s largest carmaker, climbed to a four-month high. The economy may grow about 7 percent for the “foreseeable future,” as policy makers rein in the housing “bubble” and local government debt, said Deputy Central Bank Governor Yi Gang.
The rupiah rose 1.1 percent today, the most since Sept. 19, to 11,368 per dollar as of 4:03 p.m. in Jakarta, prices from local banks show. That extended its weekly advance to 1.4 percent, the biggest since the five days ended Jan. 20, 2012.
The premium investors demand to own emerging-market debt over U.S. Treasuries fell one basis point, or 0.01 percentage point, to 322 basis points, according to JPMorgan Chase & Co.
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