Emerging Technology Shares Rally to Record While Ringgit Drops

Emerging-market technology stocks rose to a record while most shares in the benchmark gauge slid. Malaysia’s ringgit led developing-nation currencies lower.

Tencent Holdings Ltd. (700) gained to a record in Hong Kong after announcing an investment in a Chinese logistics center operator. Advanced Info Service Pcl led a 1.4 percent jump in Thailand’s SET Index. Idea Cellular Ltd. sank 5 percent in Mumbai after Credit Suisse Group AG downgraded the stock. The ringgit and Indonesia’s rupiah lost 0.3 percent versus the dollar.

Some 258 stocks dropped and 236 climbed in the MSCI Emerging Markets Index, which added 0.1 percent to 978.60 as of 2:05 p.m. in Hong Kong. That’s the gauge’s second day of gains. Developing-nation technology shares, the best performers in the past 12 months, rallied 1.1 percent today before Tata Consultancy Services Ltd. (TCS) report earnings.

“The economic growth outlook in the U.S. and Europe has improved and that will translate into more orders for emerging-market technology companies,” Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd., said from Kollam in south India today. “Technology stocks seems like a safe bet.”

In the U.S., the S&P 500 erased its 2014 decline yesterday as Bank of America Corp. joined JPMorgan Chase & Co. in reporting profit that exceeded analysts’ estimates.

The MSCI Emerging Markets Index has lost 2.4 percent this year and trades at 10 times projected 12-month earnings. The MSCI World Index has fallen less than 0.1 percent in 2014 and is valued at 14.8 times, data compiled by Bloomberg show.

Tencent Gains

Three out of the 10 industry groups in the MSCI emerging markets gauge advanced, led by technology companies. Tencent, Asia’s largest Internet company by market value, rose 2.8 percent. The company will buy 9.9 percent of China South City Holdings Ltd. as it steps up competition for e-commerce business with Alibaba Group Holding Ltd.

Taiwan Semiconductor, the world’s largest contract manufacturer of chips, added 1.9 percent, a fifth day of gains. The company reported a 7.7 percent increase in net income as global demand for mobile phones grew. The announcement was made after the market close in Taipei.

The SET Index rebounded from its steepest decline in two weeks yesterday. Advanced Info climbed 3.9 percent in Bangkok, the biggest contributor to the benchmark index’s gain. Stocks fell yesterday amid concern prolonged political unrest will deepen a slowdown in Southeast Asia’s No. 2 economy.

The Philippine Stock Exchange Index added 0.5 percent, its second day of advance.

Tata Earnings

Tata Consultancy fell 0.8 percent, erasing an earlier gain of as much as 1.1 percent. The stock rallied 73 percent in 2013, the best performance on the S&P BSE Sensex. (SENSEX) Its profit in the quarter ended December will increase 45 percent, according to the median estimate of 46 analysts in a Bloomberg survey.

Idea Cellular retreated the most since August 2012, snapping a four-day increase. The stock was cut to underperform at Credit Suisse. The Sensex traded little changed.

Malaysia’s benchmark stock gauge sank 0.5 percent and the ringgit headed for its biggest two-day drop since November, as an improving U.S. economy bolstered speculation the Federal Reserve will accelerate stimulus cuts. The rupiah weakened 0.3 percent, while the Philippine peso lost 0.1 percent.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

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