Emerging-market stocks advanced, sending the benchmark index to its third straight weekly gain, as China’s economic growth accelerated. Taiwan Semiconductor Manufacturing Co. led technology shares to a record.
The MSCI Emerging Markets Index increased 0.8 percent to 1,042.06, extending its rally for the week to 1.8 percent. A measure of technology shares in developing nations jumped to the highest level since at least 1995 as Taiwan Semiconductor climbed 2.8 percent in Taipei. Benchmark gauges in India (SENSEX) and Russia advanced more than 1.3 percent. The Brazilian real led declines among the 31 major currencies tracked by Bloomberg.
Stocks joined a global rally after data showed China’s economic growth accelerated for the first time in three quarters, as Premier Li Keqiang spurred factory output and investment to meet the government’s expansion goal for 2013. Federal Reserve Bank of Chicago President Charles Evans said yesterday the U.S. shouldn’t reduce stimulus after some economic reports stopped during a 16-day government shutdown.
“A stabilizing Chinese economy is good for emerging markets, particularly resource exporters,” Bill Adams, a senior international economist at PNC Financial Services Group in Pittsburgh, which oversees $122 billion in assets. He spoke in a phone interview. “This is one more sign that the global economy is gradually on the mend.”
All 10 industries in the MSCI Emerging Markets Index gained, as technology shares jumped 1.6 percent as a group. The benchmark gauge for developing nations has slid 1.3 percent this year to trade at 10.8 times projected earnings, compared with the valuation of 14.3 for the MSCI World Index.
The iShares MSCI Emerging Markets Index exchange-traded fund advanced 0.1 percent to $43.31. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, declined 8.1 percent to 19.98.
Brazil’s Ibovespa gained 4.2 percent for the week, the biggest advance since the five days ended Sept. 6. OGX Petroleo e Gas Participacoes SA, the oil company controlled by former billionaire Eike Batista, jumped 95 percent this week amid talks with bondholders and potential investors. The real depreciated 0.8 percent against the U.S. dollar.
Russian stocks rose to the highest level since February, erasing this week’s declines, as OAO Sberbank, the country’s largest lender, added 1.9 percent. Benchmark gauges in the Czech Republic and Hungary also gained. Alior Bank SA slumped the most since its Warsaw bourse debut in December on concern the bank will increase capital after changing accounting rules.
India’s S&P BSE Sensex soared 2.3 percent, the highest level since November 2010. Sesa Sterlite Ltd., the nation’s biggest copper producer, surged to a nine-month high. ICICI Bank Ltd. (ICICIBC) and HDFC Bank Ltd. (HDFCB), India’s biggest non-state lenders, advanced more than 3 percent each.
China’s stocks rose for the first time in four days, led by consumer discretionary and industrial companies. The nation’s economy expanded 7.8 percent in the third quarter, government data showed today, matching the median forecast of 48 economists compiled by Bloomberg. That compared with growth of 7.5 percent in the previous quarter.
Apparel maker Youngor Group Co. (600177) and BYD Co., the automaker part-owned by Warren Buffett’s Berkshire Hathaway Inc., jumped more than 7 percent to lead gains for consumer companies reliant on growth. CSR Corp. and China CNR Corp., the largest train makers, advanced at least 1.7 percent after Premier Li Keqiang said he hopes China can help Australia as it studies building its first high-speed railway.
The premium investors demand to own emerging-market debt over U.S. Treasuries slid five basis points, or 0.05 percentage point, to 313 basis points, according to JPMorgan Chase & Co.
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