Emerging-Market Stocks Rise as Telecom Shares Jump; Forint Gains

Emerging-market stocks rose as China Mobile (941) Ltd. paced gains phone companies and Brazilian shares rallied to a nine-month high.

China Mobile jumped 2.6 percent in Hong Kong after forming a cellular-tower joint venture, while the Shanghai Composite Index climbed the most in a month. Gauges in Turkey and Poland added at least 0.4 percent. Thai shares extended the longest winning streak in almost four years. The Hungarian forint ended a three-day retreat against the euro as industrial output rose. The Russian ruble slid after fighting in Ukraine renewed the risk of sanctions.

The MSCI Emerging Markets Index increased 0.5 percent to 1,063.66. A gauge of developing-nation telecommunications companies rose 1.2 percent to the highest level since November. China reports second-quarter economic-growth figures this week, while Federal Reserve Chair Janet Yellen will deliver her semiannual testimony to two congressional committees on the outlook for the U.S. economy.

“We’re seeing some rebound in EM today on the back of stabilization in European risk sentiment,” Michael Wang, an emerging-market strategist in London at Amiya Capital LLP, said by e-mail. There are “expectations that China data will show further stabilization in growth,” he said.

The developing-nation gauge has gained 6.1 percent this year and trades at 11.1 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has risen 5.2 percent in 2014 and is valued at a multiple of 15.1.

Brazilian Stocks

The Ibovespa rallied 1.7 percent in Sao Paulo. Oil producer Petroleo Brasileiro SA rose 4.5 percent, leading gains in Brazilian state-run companies amid speculation President Dilma Rousseff will lose her re-election bid after the country’s soccer team was routed in the World Cup tournament.

The forint appreciated 0.4 percent as official data showed industrial production rose 9.6 percent in May compared with a year earlier. Hungary’s benchmark BUX index added 1.1 percent. The Borsa Istanbul 100 Index climbed 1.6 percent to the highest level in more than a month.

The FTSE/JSE Africa All Shares Index rose 0.7 percent in Johannesburg and the ADX General Index in Abu Dhabi advanced 1.5 percent to the strongest close since June 12.

The ruble slid 0.3 percent, depreciating for a third day, as fighting in south-east Ukraine rekindled concern further economic sanctions will be imposed on Russia. The Micex Index fell 1.1 percent.

Joint Venture

Nine out of 10 industry groups in the emerging-markets measure rose, led by telecommunications companies. China Mobile increased the most in two months, while China Unicom (Hong Kong) Ltd. and China Telecom Corp. added at least 3.9 percent. The carriers formed a venture to build telecommunications towers to help save on capital expenditure.

The Hang Seng China Enterprises Index gained 0.8 percent, its third day of advances. The Shanghai Composite Index added 1 percent as utilities and consumer-staples shares gained on speculation profit will beat estimates.

China’s economy probably expanded 7.4 percent in the three months to June 30 from a year earlier, according to the median of 44 economists’ estimates compiled by Bloomberg before data scheduled for July 16.

Thailand’s SET Index (SET) added 0.7 percent in its 12th day of gains, taking the gauge to its highest close since June 2013. Global funds have bought a net $1.5 billion of Thai stocks and bonds this month, exchange data show.

Thai Stimulus

Thailand’s military government plans new measures to stimulate tourism and will establish special economic zones along the country’s borders, junta leader Prayuth Chan-Ocha said on July 11. The administration will also follow up on investment projects approved in the past two years, he said.

The Philippine Stock Exchange Index sank 1 percent. President Benigno Aquino’s popularity fell to record lows in two surveys as he prepared to address the country in response to an outcry over stimulus spending that was partially voided by the top court.

Indonesia’s rupiah weakened 0.7 percent, the biggest decliner among the 24 emerging-market currencies monitored by Bloomberg.

The premium investors demand to own emerging-market debt over U.S. Treasuries fell two basis point to 262, according to JPMorgan Chase & Co. indexes.

To contact the reporters on this story: Natasha Doff in London at ndoff@bloomberg.net; Anuchit Nguyen in Bangkok at anguyen@bloomberg.net

To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net; Daliah Merzaban at dmerzaban@bloomberg.net Ash Kumar, Richard Richtmyer

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