Emerging-Market Stocks Advance for Sixth Day; Ruble Strengthens

Emerging-market stocks rose for a sixth day as a rally by telecommunications and energy shares overshadowed Chinese data showing the nation’s housing slump deepened. Russia’s ruble appreciated the most among its peers.

China Mobile Ltd. (941) advanced to a six-year high as Nomura Holdings Inc. lifted its price target. OAO Lukoil and OAO Gazprom (GAZP) led gains in Russia. The ruble strengthened 0.4 percent versus the dollar after the central bank widened its trading range against a basket of currencies. Indian stocks surged to a record. The Ibovespa rose for a third day as a poll showed Brazil’s presidential race was too close to call.

The MSCI Emerging Markets Index rose 0.2 percent to 1,077.07. Ukrainian Foreign Minister Pavlo Klimkin and his Russian counterpart Sergei Lavrov met in Berlin for talks seeking to ease tension. German Foreign Minister Frank-Walter Steinmeier said after the discussion that some progress was made.

Stocks gained “mostly due to a decrease in tension between Ukraine and Russia,” Michael Wang, a markets strategist in London at Amiya Capital LLP, said by e-mail. “Telecom is up on optimism that China Mobile is going to cut expenditures.”

A gauge tracking developing-country telecommunications companies added 1.3 percent to its highest closing level since January 2013, while energy companies advanced 1 percent. China Mobile rallied 3.2 percent, contributing the most to the broader emerging-market index’s gain. Nomura raised its share-price target 28 percent, while Bocom International Holdings Co. lifted its estimate 31 percent.

Micex Streak

The stock surged to the highest level since 2008 on Aug. 15 after saying it will cut $2 billion from the subsidies that help consumers in the world’s largest market pay for smartphones from Apple Inc. and Samsung Electronics Co.

Gazprom and Lukoil both increased at least 1.2 percent. Russia’s Micex Index (INDEXCF) gained for a seventh day, the longest winning streak since September.

European leaders are pushing to halt the conflict that’s killed more than 2,000 people and fractured Ukraine since Russia annexed Crimea in March. The war, which Ukraine and its allies say is being fueled by Russia’s support for the insurgents, has also touched off sanctions that have hurt trade and threatened to send the $2 trillion economy into a recession. Russia denies it’s helping the separatists.

The ruble snapped a two-day drop versus the dollar. Russia is loosening its grip on the exchange rate even as the crisis in Ukraine spurs the fourth-biggest currency price swings in emerging markets.

Ruble Interventions

The changes are intended to help complete the shift to a freely floating ruble by the end of this year, which the central bank says is necessary to enable it to adopt inflation targeting and focus on interest rates rather than currency interventions.

The Ibovespa rose 1 percent in Sao Paulo. Brazilian stocks rallied amid speculation a new president’s policies might do more to bolster growth in Latin America’s biggest economy.

Equity markets in Turkey, Poland and Hungary added at least 0.8 percent. The DFM General Index increased 0.7 percent in Dubai, led by Emaar Properties PJSC. (EMAAR)

A Bloomberg gauge tracking 20 emerging-market currencies fell less than 0.1 percent after rising 0.4 percent last week. The premium investors demand to own developing-country debt over U.S. Treasuries narrowed seven basis points to 283, according to JPMorgan Chase & Co. indexes.

India’s S&P BSE Sensex index advanced for a fifth day, adding 1.1 percent. Prime Minister Narendra Modi pledged in his Independence Day speech to provide bank accounts and life insurance for millions of poor people while seeking to revive manufacturing in Asia’s third-largest economy.

Home Prices

The Hang Seng China Enterprises Index fell 0.4 percent today after data showed China’s new-home prices declined in July in almost all cities that the government tracks. China’s foreign direct investment fell 17 percent in July from last year, according to separate data from Ministry of Commerce. The Shanghai Stock Exchange Composite Index gained 0.6 percent.

The emerging-markets equities gauge has risen 7.4 percent this year and trades at 11.2 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index of developed nations has increased 4 percent and is valued at a multiple of 14.9.

To contact the reporters on this story: Ian Sayson in Manila at isayson@bloomberg.net; Priyanka Sharma in London at psharma142@bloomberg.net

To contact the editors responsible for this story: Daliah Merzaban at dmerzaban@bloomberg.net Zahra Hankir, Richard Richtmyer

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.