Emerging Stocks Extend Best Week Since September on Data

Emerging-market stocks rose, extending the biggest weekly gain in five months, after data in the U.S. and Europe bolstered optimism about global growth. The forint jumped as Hungary grew at the fastest pace since 2006.

The MSCI Emerging Markets Index added 1.2 percent to 957.31. The Borsa Istanbul 100 Index jumped 1.8 percent as Turkiye Garanti Bankasi AS led a rally in lenders, while homebuilders drove gains in Brazil’s Ibovespa. (IBOV) The forint appreciated as much as 1 percent, while Russia’s ruble strengthened as the central bank signaled it’s prepared to tighten monetary policy if inflation risks increase.

Equities gained after data showed consumer confidence in the U.S. was stronger than projected in February as Americans grew more upbeat about the economy. The euro-area economy expanded more than forecast in the final quarter of 2013, led by Germany and France, easing pressure on the central bank to take action to counter low inflation and spur growth.

“Emerging markets are leveraged to the economies of Europe and the U.S., and good economic data from these regions is certainly a favorable development,” Timothy Ghriskey, chief investment officer at New York-based Solaris Group LLC, which manages about $1.5 billion in assets, said by phone. “We see some good data that adds to the general confidence that the rebound in the emerging markets can be sustained.”

The iShares MSCI Emerging Markets Index exchange-traded fund rose 1.2 percent to $39.66. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, decreased 2.6 percent to 23.97.

Brazil, Russia

Brazil’s Ibovespa gained for the first time in three days as PDG Realty SA Empreendimentos & Participacoes (PDGR3) led homebuilders higher after reporting an increase in quarterly sales. Retailer Cia. Brasileira de Distribuicao Grupo Pao de Acucar advanced on fourth-quarter sales that beat forecasts.

Russian stocks rose the most in almost two months, extending this week’s advance as the weaker ruble boosted exporters. Central bank Chairman Elvira Nabiullina signaled readiness to follow countries including India, Turkey and South Africa in tightening monetary policy after the ruble’s plunge to a record low this month increased inflation risks.

The Borsa Istanbul 100 Index erased a weekly decline as Turkiye Garanti Bankasi jumped 2.7 percent. Benchmark gauges in Hungary, the Czech Republic gained, while shares in Poland retreated. The forint trimmed this year’s drop to 3.7 percent.

China’s stocks rose, with the benchmark stock gauge capping its biggest weekly advance in five months. Kweichow Moutai Co. (600519), the biggest maker of baijiu liquor, jumped 5.3 percent, pacing a rally by producers of alcoholic drinks.

Tata Motors

India’s benchmark stock index rose the most in four weeks, paring its weekly loss to less than 0.1 percent, as inflation slowed to an eight-month low. Tata Motors Ltd. (TTMT) soared the most in three months. Software exporter Infosys Ltd. (INFO) led its peers higher. Reliance Industries Ltd. (RIL), the owner of the world’s largest refining complex, gained the most in a month.

Indonesia’s shrinking current-account deficit has turned the rupiah into the world’s best-performing emerging-market currency this year, after it weakened in 2013 by more than any other peer apart from Argentina’s peso. Global funds have pumped more than $1 billion into Indonesia’s stocks and bonds in 2014 as the country reported December’s trade surplus was the biggest in more than two years.

The premium investors demand to own emerging-market debt over U.S. Treasuries fell two basis points, or 0.02 percentage point, to 338 basis points, according to JPMorgan Chase & Co.

To contact the reporters on this story: Elena Popina in New York at epopina@bloomberg.net; Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net; Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

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

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