Emerging-market stocks rose to the highest level since November as exit polls in India helped push the nation’s benchmark gauge to a record and Russian stocks climbed for a fifth day.
The MSCI Emerging Markets Index rose 0.7 percent to 1,022.41. The S&P BSE Sensex added 1.4 percent amid speculation Narendra Modi’s opposition bloc will win a majority in India’s national elections. The rupee also rallied as investors bet a Bharatiya Janata Party-led government can revive the economy. Brazil’s Ibovespa fell on concern its recent gains were excessive given the outlook for the country’s economy.
The Micex (INDEXCF) Index rose to the highest since Feb. 28 after Russian President Vladimir Putin called for dialogue over Ukraine, while Russia’s currency extended gains as the Finance Ministry said it will offer 10 billion rubles ($287 million) of bonds.
“The Indian polls signal a potentially larger-than-expected victory for Modi; that would be very bullish for reforms,” Michael Wang, an emerging-markets strategist in London at Amiya Capital LLP, said by e-mail. “The Ukraine referendum on Sunday has so far not led to much further escalation.”
The developing-nation measure has increased 2 percent this year and trades at 10.6 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has risen 2.2 percent in the period, and is valued at a multiple of 14.3.
The Ibovespa retreated 0.3 percent. Lender Itau Unibanco Holding SA fell 0.6 percent, contributing the most to the index’s decline. The benchmark has gained 20 percent from this year’s low in March. Brazil’s economic growth this year will slow to 1.69 percent from 2.28 percent in 2013 as inflation accelerates to 6.39 percent, according to a central bank survey of economists published yesterday.
The Micex rose 0.7 percent and the ruble strengthened 0.7 percent against the dollar as investors bet the European Union’s latest sanctions won’t hurt the energy exporter’s economy. OAO Gazprom, the world’s largest exporter of natural gas, climbed 2 percent, while Russia’s biggest lender, OAO Sberbank, advanced 1.4 percent in the fifth day of gains.
Putin and Didier Burkhalter, chairman of the Organization for Security and Cooperation in Europe, agreed on the need for talks over Ukraine after weekend referendums on independence in two eastern regions, the Kremlin said in an e-mailed statement.
Russia will sell notes due August 2023 at an auction tomorrow, according to a statement on the Finance Ministry’s website. The government hasn’t placed any bonds since the start of April and canceled its last auction on April 23 because of a lack of “adequate” bids, according to the ministry.
Dubai’s DFM General Index (DFMGI) jumped 2.2 percent. The gauge is the best performer this year among 93 global equity markets tracked by Bloomberg.
The premium investors demand to own emerging-market debt over U.S. Treasuries increased four basis points to 280, according to JPMorgan Chase & Co. indexes.
The Shanghai Composite Index (SHCOMP) slipped 0.1 percent after a report showed Chinese factory production rose 8.7 percent in April from a year earlier, missing the 8.9 percent median estimate in a Bloomberg survey.
“China is the biggest question mark for emerging-market investors these days as the U.S. and European economies seem to have stabilized already,” Agus Yanuar, president director of PT Samuel Aset Manajemen, which oversees about $338 million, said by phone from Jakarta.
(An earlier version of this story was corrected because Narendra Modi was misspelled.)