Emerging-market stocks rose to a two-week high as better-than-estimated U.S. data bolstered optimism about global growth. Turkey’s benchmark equity index jumped as BlackRock Inc. said it’s buying the nation’s shares.
The MSCI Emerging Markets Index added 0.3 percent to 995.35, advancing for a second day. The Borsa Istanbul National 100 Index rebounded from a three-month low after the world’s biggest money manager said valuations of Turkish shares are compelling. The lira led gains among the 31 major currencies tracked by Bloomberg after Turkey’s central bank said it would buy at least $6 billion by the end of January. China’s benchmark money-market rate tumbled the most since February 2011.
Eight out of 10 groups in the emerging-market stock gauge rose, led by industrial and financial shares, which are most-dependent on economic growth. Equities gained after data showed purchases of new U.S. homes held near a five-year high and orders for durable goods climbed more than forecast, indicating growing momentum at the world’s largest economy.
“There are hopes and bets that at least a slight pick-up in economic activity in EMs will follow on the back of the strong momentum in the U.S. economy,” Slava Smolyaninov, chief strategist at UralSib Financial Corp. in Moscow, said by e-mail.
The iShares MSCI Emerging Markets Index exchange-traded fund added 0.6 percent to $41.02. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, declined 2.4 percent to 19.95.
Mexico’s IPC Index rallied to the highest in four months, led by billionaire Emilio Azcarraga’s Grupo Televisa SAB.
Most Russian shares fell amid record outflows from equity funds as power stocks slid ahead of New Year’s holidays. The Micex Index (INDEXCF) retreated less than 0.1 percent in Moscow, trimming this year’s gain to 2.2 percent. Federal Grid Co., OAO Inter RAO UES and OAO Russian Grids dropped more than 1.5 percent.
The Borsa Istanbul gauge gained 1.3 percent, led by banks. Turkish stocks tumbled this month as Prime Minister Recep Tayyip Erdogan’s government was hit by a corruption probe that has also fueled concern he faces a power struggle with an Islamic cleric. The nation’s equity gauge was priced at 9 times trailing 12-month earnings at yesterday’s close of trading.
“We have been adding to positions in Turkey, especially in the financial sector, over the last few days, as valuations are now compelling,” Sam Vecht, head of the emerging markets specialist team at BlackRock in London, said yesterday in e-mailed comments. “Historically, in emerging markets it has paid off to be brave when others are fearful.”
The lira advanced 1 percent, the most since Sept. 18. It dropped to a record low against the dollar earlier today.
China’s stocks climbed for a second day as money-market rates slid after the central bank’s first reverse-repurchase operations in three weeks. GoerTek Inc. (002241), an Apple Inc. supplier, jumped the most in a month after the U.S. company signed a deal with China Mobile Ltd. to sell iPhones. Guangzhou Baiyun International Airport Co. gained 4.1 percent after the Shanghai Securities News said a free-trade zone plan for Guangdong has been submitted to the State Council.
Indian (SENSEX) stocks declined, with the benchmark index ending a two-day advance, before the settlement in monthly equity derivatives this week. Hindustan Zinc Ltd. (HZ) slid the most in about two weeks after the nation’s top investigating agency started a probe into the role of billionaire Anil Agarwal and some government officials in the sale of a stake in the company, citing irregularities in the divestment process.
The premium investors demand to own emerging-market debt over U.S. Treasuries fell five basis points, or 0.05 percentage point, to 306 basis points, according to JPMorgan Chase & Co.
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