Emerging Stocks Rise Most in Month After U.S. Jobs Report

Emerging-market stocks advanced the most in a month, trimming their weekly decline, after a worse-than-estimated U.S. jobs report eased concern that the Federal Reserve will accelerate the pace of stimulus cuts.

The MSCI Emerging Markets Index increased 0.7 percent to 970.15, paring its retreat for the week to 1 percent. The Borsa Istanbul 100 Index drove gains among the 94 world stock gauges tracked by Bloomberg amid a bank rally, while Russia’s Micex Index erased losses as OAO Gazprom climbed. Mexico’s IPC index rose the most since November as as pay-TV provider Grupo Televisa SAB surged. South Africa’s rand and Brazil’s real led advances among 21 out of 24 developing-nation currencies.

Equities rallied as data showed U.S. payrolls increased at the slowest pace since January 2011, indicating a pause in the recent strength of the jobs market. Fed policy makers, who in December decided to cut monthly bond purchases to $75 billion from $85 billion, cited improvement in the labor market. The gauge for developing-nation stocks has slid as much as 16 percent since May 22, when the Fed signaled stimulus could be trimmed if the economy showed sustained improvement.

“For emerging markets, this is a good number, because it definitely puts the Fed tapering on the softest trajectory possible,” Paul Zemsky, the head of multi-asset strategies at ING U.S. Investment Management, which oversees $200 billion, said by phone from New York. “The tapering impact and the stronger dollar impact on emerging markets will be less for the next couple of weeks.”

Emerging ETF

All 10 groups in the gauge for developing-nation stocks advanced, led by commodity companies. The iShares MSCI Emerging Markets Index exchange-traded fund rose 1.8 percent to $40.27. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, lost 5.8 percent to 22.10.

Brazil’s Ibovespa climbed the most in a week as commodity producers rallied after a report showing imports increased more than forecast in China. Vale SA and Petroleo Brasileiro SA climbed. The real added 1.4 percent. Mexico’s IPC rose the most among major gauges in the Americas as Grupo Televisa rallied to a record high.

The Borsa Istanbul 100 Index jumped 2.3 percent as Turkiye Garanti Bankasi AS drove a rally in banks. Russian stocks rose, paring their worst weekly decline since June, as Gazprom advanced 0.8 percent. OAO Magnit, Russia’s largest retailer, reported slower sales growth in December as consumer-spending weakened, sending the shares down the most since 2011.

South Africa’s rand rebounded from the lowest level since October 2008. The recent slump in the value of the currency is unlikely to negatively affect the nation’s credit rating, Moody’s Investors Service said.

China, India

China’s stocks fell for a third day amid concern new share offerings will divert funds. The benchmark index posted its steepest five-day loss in three weeks. China Railway Construction Corp. slid 2.8 percent to drag down industrial companies. Goertek Inc., a supplier to Apple Inc., declined to the lowest level since June. Haitong Securities Co. slid to a two-month low after posting a loss in December.

Most Indian (SENSEX) stocks fell, with the benchmark index completing a second week of losses. Software exporters rallied after Infosys Ltd. (INFO) raised its sales forecast and reported earnings that beat estimates. Larsen & Toubro Ltd. (LT), the nation’s biggest engineering company, dropped for a third day. ICICI Bank Ltd. (ICICIBC) was the worst performer on the S&P BSE Sensex.

Malaysia’s ringgit posted its best week since October after trade data signaled a sustained recovery in Southeast Asia’s third-biggest economy. Thailand’s baht had a fourth weekly slide and the 10-year bonds fell as anti-government protests since October prompted global investors cut holdings. South Korea’s won led declines in Asian currencies this week.

The premium investors demand to own emerging-market debt over U.S. Treasuries advanced 10 basis points, or 0.1 percentage point, to 321 basis points, according to JPMorgan Chase & Co.

To contact the reporters on this story: Julia Leite in New York at jleite3@bloomberg.net; Lyubov Pronina in London at lpronina@bloomberg.net; Elena Popina in New York at epopina@bloomberg.net

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

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