Most Emerging-Market Stocks Rise as IMF Lifts Forecast

Most emerging-market stocks advanced after China’s central bank eased a cash shortage in the financial system and the International Monetary Fund raised its forecast for global economic growth this year.

More than 440 stocks in the MSCI Emerging Markets Index gained while 321 declined. The gauge retreated less than 0.1 percent to 970.75. The Shanghai Composite Index climbed after closing below 2,000 yesterday for the first time since July. Russian stocks rose to the highest in four weeks as OAO Gazprom (OGZD) surged on speculation it will announce a pricing agreement for natural gas with China National Petroleum Corp. tomorrow.

The global economy will grow 3.7 percent this year, compared with an October estimate of 3.6 percent, the IMF said in revisions to its World Economic Outlook released in Washington today. The seven-day repurchase rate, a gauge of interbank funding availability, dropped 88 basis points to 5.44 percent in Shanghai, according to a daily fixing compiled by the National Interbank Funding Center. It surged 153 basis points yesterday, the most in seven months.

“If in fact global growth picks up, you’re going to see that emerging markets are beneficiary,” Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees more than $1 trillion, said by phone.

The MSCI developing-nation gauge has lost 3.2 percent so far this year and trades at 9.2 times 12-month projected earnings, according to data compiled by Bloomberg. The MSCI World Index is valued at a multiple of 14.8.

Emerging ETF

The iShares MSCI Emerging Markets Index exchange-traded fund decreased 0.2 percent to $39.73, dropping for a fourth day. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, jumped 4.5 percent to 21.16.

Brazil’s Ibovespa declined for a fourth consecutive day in its longest losing streak since November as steelmaker Cia. Siderurgica Nacional SA led losses among commodity producers. Iron-ore producer Vale SA (VALE5) fell to a five-month low.

The Micex Index (INDEXCF) climbed to the highest level since Dec. 24 in Moscow as Gazprom surged 4.3 percent. United Co. Rusal, the world’s biggest aluminum producer, surged 9.6 percent, the biggest gain since the shares debuted in 2010. The lira weakened to a record after Turkey’s central bank kept interest rates on hold while predicting inflation would stay “markedly” above its targets.

China, India

China’s stocks rose, spurring the benchmark index’s biggest gains in a week, after the central bank eased the cash shortage in the financial system and phone-equipment maker ZTE Corp. returned to profit. Shanghai Pudong Development Bank Co. climbed 1 percent after the People’s Bank of China expanded a lending facility to include smaller lenders.

Indian stocks advanced for a second day amid optimism the government’s plan to sell its holdings in Hindustan Zinc Ltd. (HZ) and Axis Bank Ltd. will help cut the budget deficit and reduce the chances of a credit-rating downgrade. Hindustan Zinc jumped to a one-month high after the government said will sell its $2.7 billion stake to billionaire Anil Agarwal.

The premium investors demand to own emerging-market debt over U.S. Treasuries fell one basis point, or 0.01 percentage point, to 316 basis points, according to JPMorgan Chase & Co.

To contact the reporters on this story: Elena Popina in New York at epopina@bloomberg.net; Maria Levitov in London at mlevitov@bloomberg.net; Sharon Cho in Seoul at ccho28@bloomberg.net

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

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