Emerging-market stocks rallied for a second day after the International Monetary Fund raised its global growth forecast and on speculation China and Brazil will act to boost growth.
The MSCI Emerging Markets Index gained 0.4 percent to 1,023.75 at the close in New York. Samsung Electronics Co. climbed 3.5 percent in Seoul, as technology companies led gains. JBS SA, the world’s largest beef producer, gained the most in more than a month and the Bovespa advanced for a second day. Turkish stocks fell the most in a week.
The IMF raised its 2012 estimate for global economic growth to 3.5 percent from a January projection of 3.3 percent, the first increase in more than a year. China’s economy faces no risks of a hard landing this year, though the government should be vigilant against the chance of growth decelerating too quickly, an economic researcher said today. China’s home prices fell in a record 37 of 70 cities tracked by the government in March. Brazil will cut its benchmark lending rate by 0.75 percentage point, according to economists surveyed by Bloomberg.
“Speculation of easing measures in China and a positive outlook in the latest IMF report have boosted buying interest in equities, brushing aside the accelerated downside housing data in China,” Benoit Anne, chief emerging-markets strategist at Societe Generale SA in London, wrote in an e-mailed note to clients.
The MSCI Emerging Markets Index has risen 12 percent this year, compared with an 8.6 percent gain in the MSCI World Index of developed nations. Shares in the developing nation gauge are trading at 10.4 times estimated earnings, cheaper than the 12.5 multiple of the developed-nation counterpart.
The IShares MSCI Emerging Markets Index exchange-traded fund, the most-traded ETF to track developing-nation shares, fell 0.5 percent to $42.23 in New York. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a gauge of options prices on the fund and expectations of price swings, rose 0.6 percent to 27.39.
Brazil, South Africa
Brazil’s Bovespa gained 0.5 percent, as 45 stocks advanced and 22 retreated. JBS gained 6.3 percent.
Brazil’s central bank will lower the benchmark Selic rate today to 9 percent from 9.75 percent, according to the median estimate in a Bloomberg survey of 69 economists. Every economist is predicting a rate cut of at least 50 basis points, or 0.5 percentage points.
The FTSE/JSE Africa All Share Index advanced for a second day, gaining 0.8 percent in Johannesburg. BHP Billiton Ltd., the world’s biggest resources company, climbed 1.8 percent and Anglo American Plc, the diversified miner, jumped 1.7 percent.
The IMF is predicting growth for China of 8.2 percent even after the country unveiled a target of 7.5 percent last month.
The Shanghai Composite Index jumped 2 percent, the most in more than two months. The Hang Seng China Enterprises Index gained 0.9 percent, ending a two-day drop.
The Chinese central bank should lower the reserve-requirement ratio and adjust the loan-to-deposit ratio to increase banks’ lending capacity and meet credit demand in the economy, Wang Jun, a researcher with the China Center for International Economic Exchanges, said at a Beijing seminar in comments that were posted on www.china.com.cn, a website controlled by the State Council Information Office.
Samsung Electronics, the world’s largest seller of smartphones last year, climbed the most in more than a month on speculation the company’s patent dispute with rival Apple Inc. will reach a settlement.
South Korea’s Kospi Index increased 1 percent while the BSE India Sensitive Index advanced 0.2 percent. The WIG20 Index slipped 1.1 percent in Poland, falling for the first time this week.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose four basis points, or 0.04 percentage points, to 360, according to JPMorgan Chase & Co.’s EMBI Global Index.