Emerging-market stocks posted a second weekly gain amid speculation the strengthening U.S. economy will boost demand for exports from developing nations, outweighing concern that global political tension is escalating.
Samsung Electronics Co. (005930) rose 1 percent as a technology gauge climbed after dropping the most in two weeks yesterday. The Shanghai Composite Index (SHCOMP) posted its longest weekly winning streak since 2012. The Micex (INDEXCF) Index ended a 10-day gain in Moscow as NATO condemned the entry of a Russian aid convoy into Ukraine and said it sees an “alarming build-up” of troops on the border. Brazil’s Ibovespa fell for the first time in seven days.
The MSCI Emerging Markets Index added 0.1 percent to 1,083.40, taking its gain this week to 0.8 percent. Data from housing to manufacturing yesterday signaled the U.S. economy is accelerating. Federal Reserve Chair Janet Yellen said the U.S. economy has made “considerable progress in recovering” in comments at at a symposium in in Jackson Hole, Wyoming.
“Decent data out of the U.S. yesterday helped external demand for emerging-market exports,” Michael Wang, a emerging-markets strategist in London at Amiya Capital LLP, said by e-mail. Tension around the Russian aid convoy “is negative for emerging-market risk sentiment,” he said.
Six of 10 industry groups in the developing-nation gauge rose, led by a 1 percent advance in the information technology measure. The premium investors demand to own developing-country debt over U.S. Treasuries widened one basis point to 281, according to JPMorgan Chase & Co. indexes.
China, South Korea
A Bloomberg gauge tracking 20 developing-nation currencies fell 0.1 percent, pushing its weekly drop to 0.6 percent weekly drop. Russia’s ruble weakened 0.1 percent to 36.1073 per dollar.
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong climbed 1.1 percent, while the Shanghai Composite Index added 0.5 percent, extending gains this week to 0.6 percent, its sixth week of advances. Taiwan’s Taiex Index rose 1.4 percent, the most since Oct. 3, while Indian shares rose to a record, paced by increases in Infosys Ltd.
South Korea’s Kospi index advanced 0.6 percent as the won strengthened the most in a week. The Malaysian ringgit and Indian rupee appreciated by at least 0.3 percent.
The Micex fell 1 percent. Mail.Ru Group Ltd. tumbled the most since March in London after the operator of a social networking site cut its full-year sales forecast amid a slowdown in advertising spending as sanctions against Russia threaten to exacerbate an economic slowdown.
The hryvnia slid to 2.4 percent against the dollar, taking this month’s drop to 9.4 percent. Russia is invading under the cover of aid trucks, Valentyn Nalyvaychenko, the head of Ukraine’s security council, said on TV5. Ukraine said the convoy moved into the country without its consent.
The Russian gauge rallied 9.6 percent in the previous 10 days on bets a meeting between President Vladimir Putin and his Ukrainian counterpart next week will reduce tension. Declines today were “stoked by the news of the convoy entering Ukraine without permission,” Neil Shearing, the chief emerging-market economist at Capital Economics Ltd., said by phone from London.
The Ibovespa declined 1 percent.
Today’s gain boosted the 2014 advance for the MSCI Emerging Markets Index to 8.1 percent, beating the 4.6 percent increase in the MSCI World Index. The rally pushed developing-country valuations to 11.3 times projected 12-month earnings, near the highest since 2011, compared with a multiple of 15 for the MSCI World.
To contact the editors responsible for this story: Daliah Merzaban at email@example.com Zahra Hankir, Richard Richtmyer