Emerging-market shares rose for a fourth day after earnings that beat analysts’ estimates at Alcoa Inc. and a Greek debt sale at lower-than-forecast yields bolstered investor confidence in the global economic recovery.
The MSCI Emerging-Market Index increased 0.5 percent to 957.22 by 5 p.m. in New York, the highest level in almost three weeks. The measure fell as much as 0.5 percent earlier today, led by Asian shares, on concern China will keep real-estate curbs. The MSCI EM Eastern Europe Index advanced 2 percent. Russia’s Micex Index climbed 1.7 percent. Brazil’s Bovespa stock index climbed the most since July 7, rising 1.2 percent.
Alcoa kicked off the U.S. earnings season yesterday with second-quarter results that topped projections and forecast higher global demand for aluminum. Bayerische Motoren Werke AG, the biggest maker of luxury cars, raised its 2010 earnings forecast today, adding to speculation the global economy will weather Europe’s debt crisis. Greece sold 1.625 billion euros ($2.1 billion) of 26-week Treasury bills at a yield of 4.65 percent. ING Groep NV had forecast a rate near 5 percent.
“The Greek auction is certainly welcome news,” said Nigel Rendell, senior emerging markets strategist at RBC Capital Markets in London. “We’ve got quite a busy week in terms of data. So those things could certainly derail sentiment in the next few days.”
The extra yield investors demand to own emerging-market debt over U.S. Treasuries dropped for a seventh day, declining 16 basis points to 2.97 percentage points, according to JPMorgan Chase & Co.’s EMBI+ Index.
The leu weakened for a third day against the euro, losing 0.3 percent, on concern Romania’s recession will be deeper than forecast. The economy will probably contract more than 1.5 percent this year after a sales-tax increase introduced to satisfy terms of an International Monetary Fund loan that requires the country to shrink its budget deficit, Ziarul Financiar reported, citing Finance Minister Sebastian Vladescu.
The Shanghai Composite Index fell 1.6 percent, the biggest retreat among benchmark stock indexes in major emerging markets, after the Ministry of Housing and Urban-Rural Development reiterated that it will maintain curbs on speculative purchases and increase market supply, while China’s banking regulator said it has made no changes to policies on home loans. Poly Real Estate Group Co. and Industrial & Commercial Bank of China Ltd. led the drop.
In Brazil, PDG Realty SA Empreendimentos & Participacoes led advances among real-estate companies after saying its sales surged 53 percent. PDG Realty, Brazil’s third-biggest homebuilder by revenue, gained 4 percent.
Chinese shares are the world’s worst performers this year among major markets after Greece’s, with the Shanghai gauge losing 25 percent since December on concern tighter monetary policy and real estate regulation will slow growth in the world’s fastest-expanding major economy.
In China, “it’s hard to believe that the government would reverse its crackdown on the property industry so quickly and anyone who hoped so is now disappointed,” said Zhang Ling, a fund manager at Shanghai River Fund Management Co.
China’s property prices fell 0.1 percent in June from the previous month, ending 15 months of gains, statistics bureau data showed yesterday. New lending of 603 billion yuan ($89 billion) last month was the least in three months, the central bank said July 11.
Infosys Technologies Ltd., India’s second-largest software exporter, tumbled 3.4 percent, the most since September, after profit declined 2.6 percent to 14.9 billion rupees ($318.5 million) in the three months through June from a year earlier. That was less than the 15.6 billion rupee average of 25 analyst estimates compiled by Bloomberg. India’s Bombay Stock Exchange Sensitive Index rose 0.3 percent.