Emerging-market stocks rose as Russia’s OAO Gazprom (GAZP) gained after signing a $400 billion gas supply deal with China and investors speculated that the Federal Reserve will keep U.S. interest rates low.
Gazprom climbed as the Micex Index advanced to the highest since late February in Moscow. Dubai’s DFM General Index surged 4.2 percent, the best performer among 93 gauges tracked by Bloomberg. The Hang Seng China Enterprises Index (HSCEI) of mainland shares traded in Hong Kong rose to a one-month high. India’s S&P BSE Sensex index fell from a record.
The MSCI Emerging Markets Index added 0.3 percent to 1,032.55. The supply pact between Russia and China paves the way for hundreds of billions of dollars in sales over the next three decades. The Fed said in minutes of its April 29-30 meeting that continued stimulus doesn’t risk sparking a jump in the inflation rate.
“At this point, we’re not expecting a rate hike until well into 2015,” Paul Christopher, the St. Louis-based chief international strategist at Wells Fargo Advisors, which manages $1.4 trillion, said by phone. “This is going to be the key external factor for emerging markets. The faster the U.S. economy accelerates, the faster the dollar appreciates and the faster capital resumes flowing out of emerging markets. But until then, it’s a carry environment. It’s wait and see.”
Preliminary manufacturing data for this month due from HSBC Holdings Plc and Markit Economics tomorrow is expected to signal a fifth month of contraction in China, according to analysts surveyed by Bloomberg.
The developing-nation gauge has gained 3 percent this year and trades at 10.7 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has risen 1.8 percent in 2014, and is valued at 14.2 times.
The Micex jumped 1 percent. Russia and China reached a deal to supply natural gas through a new pipeline between the two countries.
The Sensex slipped 0.3 percent while the rupee weakened for a second day. India’s equity measure has jumped 23 percent since the Bharatiya Janata Party named Narendra Modi as its candidate for prime minister on Sept. 13. Modi will be sworn in on May 26 after the BJP and its allies won the first parliamentary majority in 30 years.
Dubai’s equity gauge ended a five-day losing streak, its longest rout in two years.
The Ibovespa slipped 0.3 percent as lenders tumbled after Brazil’s Superior Court of Justice ruled against banks in a case that determines how much delinquent interest can be charged in class-action lawsuits. State-run Banco do Brasil SA was the worst performer, dropping 7.2 percent.
South Africa’s rand gained 0.5 percent after a report showed the inflation rate rose above the central bank’s target for the first time since August, fueling speculation of an interest-rate increase at a monetary policy meeting tomorrow. The rate climbed to 6.1 percent in April, compared with the 6 percent median estimate of 30 economists surveyed by Bloomberg.
The Borsa Istanbul 100 Index rose 1.6 percent as lenders rallied on speculation the Turkish central bank will cut interest rates at a meeting tomorrow.
Egypt’s benchmark EGX 30 Index retreated from a six-year high before the start of a presidential election next week. The government isn’t ruling out levying a capital-gains tax as part of a plan to increase revenue and cut the budget deficit, Finance Minister Hany Kadry said yesterday.
Seven out of 10 industry groups in the emerging-markets measure advanced, led by energy companies.
The Shanghai Composite Index rebounded after falling below 2,000, a threshold that analysts have cited as a trigger for state-linked funds to enter the market and policy makers to announce measures for supporting growth. Phone calls to China Investment Corp., the sovereign fund that holds the government’s stakes in banks and brokerages, and unit Central Huijin Investment Ltd. were not immediately answered. The Hang Seng China gauge rose 1.1 percent.
The Philippine Stock Exchange Index slumped 1.8 percent as valuations were near the highest since August. SM Investments Corp. and SM Prime Holdings Inc. tumbled at least 3.5 percent.
The premium investors demand to own emerging-market debt over U.S. Treasuries fell three basis points to 282, according to JPMorgan Chase & Co. indexes.
To contact the editors responsible for this story: Daliah Merzaban at email@example.com Ash Kumar, Richard Richtmyer