Emerging-market stocks rose for an eighth day, the longest rally in 15 months, as an increase in U.S. manufacturing bolstered confidence in global growth and concern eased that the crisis in Ukraine would escalate.
The MSCI Emerging Markets Index added 0.6 percent to 1,000.79. Russia’s Micex Index erased losses, while Ukraine’s UX Index extended a two-day rally to 8.6 percent. India’s S&P BSE Sensex (SENSEX) jumped to a record, led by industrials and software exporters. Brazil’s Ibovespa (IBOV) posted the biggest decline among major developing-nation stock gauges as inflation accelerated.
Equities rose after data showed U.S. manufacturing expanded at a faster pace in March amid gains in production and orders. German Chancellor Angela Merkel spoke to Russian President Vladimir Putin yesterday and said he had ordered a partial withdrawal from Ukraine’s borders. The North Atlantic Treaty Organization said it will recommit to defending frontline states in eastern Europe that have been unsettled by the seizure of Crimea as the alliance reported no signs of a Russian pullback.
“We’re muddling along with positive growth,” James W. Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.6 billion from Boston, said by phone. “That’s a good thing. Sentiment had been negative for so long, that we could simply be getting a bit of a relief rally.”
The iShares MSCI Emerging Markets Index exchange-traded fund advanced 1.2 percent to $41.49, rising for an ninth day. The premium investors demand to own emerging-market debt over U.S. Treasuries slipped 0.06 percentage point to 291 basis points, according to JPMorgan Chase & Co.
The Micex gauge rose for a third day as diamond producer OAO Alrosa climbed 5.2 percent, while Ukraine’s UX Index rallied 5.7 percent. Interfax cited Russia’s Defense Ministry as announcing that a motorized battalion was being pulled out.
India’s Sensex gained as Reliance Industries Ltd. (RIL), owner of the world’s largest refining complex, surged to its highest level in about three years. Tata Steel Ltd. (TATA) rose for a seventh day, helping a gauge of metal companies rise to a 14-month high.
China’s stocks advanced for the first time in five days as Poly Real Estate Group Co. led a rally for property developers. Manufacturing gauges pointed to weakness in the world’s second-biggest economy that could prompt the Communist Party leadership to roll out additional support measures.
Brazil’s Ibovespa fell amid speculation a two-week surge that pushed Brazilian stock valuations to the highest since January was excessive. Oi SA (OIBR4) dropped after people familiar with the matter said Citigroup Inc., Itau Unibanco Holding SA and Banco Bradesco SA are among banks considering dropping out of a plan to underwrite 6 billion reais ($2.7 billion) in new shares as part of the phone company’s capital increase plan.