Emerging Stocks Climb on Russia as RTS Leads World Gains

Emerging-market stocks advanced, rebounding from a one-month low, as concern eased that the referendum in Crimea will lead to more violence in the region. Russia’s RTS Index rose the most among global equity gauges.

The MSCI Emerging Markets Index rose 0.6 percent to 943.22. The Micex Index, which slumped into a bear market last week, climbed 3.7 percent, while the dollar-denominated RTS posted the biggest gain among 94 equity measures. Benchmark gauges in Hungary, Poland and Turkey added more than 1.4 percent. Indonesia’s rupiah rallied to the highest in 19 weeks as Jakarta Governor Joko Widodo’s candidacy lured foreign inflows.

The European Union and the U.S. announced sanctions targeting Russian officials as Crimean lawmakers declared independence after more than 96 percent of voters in the Black Sea peninsula backed joining Russia in yesterday’s referendum. Ukraine, the U.S. and the EU said they don’t recognize the vote. The incorporation of the region could be completed by the end of the week, according to Crimean and Russian officials.

“There was some relief that the referendum occurred without a lot of violence,” Derrick Irwin, a money manager of the Wells Fargo Advantage Emerging Markets Equity Fund in Boston, said by phone. His firm oversees about $357 billion. “The outcome of the vote was a foregone conclusion. What will matter now is how Russia responds. The players are all working through their scenarios.”

Ruble Rallies

Russia’s ruble snapped a six-day losing streak and stocks rose from a four-year low on speculation any sanctions imposed over the Crimea referendum will fail to hurt the economy of the world’s largest energy exporter.

Brazil’s Ibovespa (IBOV) rose for the first time in three days, following a plunge that pushed the benchmark into a bear market, as economists covering Brazil raised their forecasts for gross domestic product growth.

China’s stocks advanced to the highest in a week, led by property, auto and cement companies, after the government outlined urbanization plans. The yuan sank to an 11-month low and options traders turned more bearish on the currency as the central bank doubled trading limits versus the dollar.

Indonesia’s rupiah rallied and earlier touched the highest since October after foreign funds pumped money into local stocks as Widodo said he would run in July’s presidential election.

The iShares MSCI Emerging Markets Index exchange-traded fund rose 1.2 percent to $38.87. The premium investors demand to own emerging-market debt over U.S. Treasuries dropped 0.06 percentage point to 322 basis points, according to JPMorgan Chase & Co.

To contact the reporters on this story: Julia Leite in New York at jleite3@bloomberg.net; Natasha Doff in London at ndoff@bloomberg.net

To contact the editors responsible for this story: Daliah Merzaban at dmerzaban@bloomberg.net Rita Nazareth, Ash Kumar

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