Emerging-market stocks rose to the highest level in more than a week as economic data from China and South Korea beat estimates and Europe’s leaders took steps to stem the debt crisis.
The MSCI Emerging Markets Index added 0.4 percent to 941.40 at the close in New York, extending its biggest gain in eight months on June 29. Energy companies led the advance as OGX Petroleo e Gas Participacoes SA surged the most since 2008 to lift Brazil’s Bovespa by 0.6 percent. Russian stocks advanced to the highest since May 10 after OAO E.On Russia, the power generator controlled by Germany’s EON AG, rallied.
China’s Purchasing Managers’ Index for June exceeded economists’ estimates while South Korean exports grew for the first time in four months. European leaders eased aid requirements for Spain and Italy last week. Institutional Revolutionary Party candidate Enrique Pena Nieto claimed victory in Mexico’s presidential election yesterday. Construction spending in the U.S. increased 0.9 percent in May.
“The positive sentiment after the European Union summit has seen a strong risk-on trade globally,” Quinten Bertenshaw, a Johannesburg-based analyst at Tradition Analytics, wrote in e-mailed comments. The European Central Bank “will feel more at ease in adopting more accommodative monetary policy without feeling that it is bowing to government pressure to do so.”
The 21 countries in the developing-nation gauge send about 30 percent of their exports to the EU on average, data compiled by the World Trade Organization show.
The MSCI Emerging Markets gauge has advanced 2.7 percent this year, compared with a 4.9 percent gain in the MSCI World Index. Shares in the emerging-markets index are trading at 10.1 times estimated earnings, compared with the MSCI World’s multiple of 12.3, according to data compiled by Bloomberg.
The IShares MSCI Emerging Markets Index exchange-traded fund, the most-traded ETF tracking developing-nation shares, was little changed at $39.13 today.
The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, rose 2.3 percent to 26.39.
Construction spending in the U.S. increased 0.9 percent in May to the highest level in more than two years, held up by improvement in the housing market. The median estimate of economists surveyed by Bloomberg News called for a 0.2 percent increase.
A manufacturing index by the Institute for Supply Management fell to 49.7 in June from 53.5 a month earlier. Estimates of the 70 economists surveyed by Bloomberg News called for a drop ranging from 50.5 to 53.5.
Russia’s Micex Index climbed 1.1 percent, reversing an earlier 0.3 percent decline. E.On Russia gained 5.5 percent in Moscow after its board approved paying its first dividend in four years.
The Bovespa rose 0.6 percent, paring earlier losses of as much as 0.7 percent, led by OGX Petroleo e Gas Participacoes SA, the Brazilian oil company controlled by billionaire Eike Batista. The company’s shares jumped 15 percent for a second day of gains.
Egypt’s benchmark stock index gained the most in a week, jumping 5 percent in the first trading session after Mohamed Mursi was sworn in as the country’s first democratically elected president.
Hungary’s BUX Index dropped 0.4 percent while the PX Index in Prague jumped 1.2 percent.
The ISE National 100 Index fell 1 percent in Istanbul. Turkey’s economy expanded by an annual 3.2 percent in the first quarter, the slowest pace since 2009.
Poland’s WIG20 Index retreated 0.9 percent. PBG SA jumped 19 percent. The Polish construction company declared bankrupt last month may ask a government fund for state aid to resume operations.
China’s Purchasing Managers’ Index fell to 50.2 in June from 50.4 in May, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing reported yesterday. That compares with the 49.9 median estimate in a Bloomberg survey of 24 economists. A final PMI reading for June by HSBC Holdings Plc and Markit Economics today was better than a preliminary level published last month.
The nation’s new home prices rose for the first time in 10 months, adding 0.1 percent from May to 8,688 yuan ($1,368) per square meter, according to a survey of 100 cities by SouFun Holdings Ltd., China’s biggest real estate website owner.
The Shanghai Composite Index rose less than 0.1 percent. Shares of Chinese companies listed in Hong Kong did not trade today as the city was closed for a public holiday.
South Korea’s overseas shipments rose 1.3 percent in June from a year earlier, after a revised 0.6 percent decline in May, according to data from the Ministry of Knowledge Economy on July 1. That beat the median estimate of a 0.5 percent gain in a Bloomberg survey of 16 economists.
Hyundai Motor climbed 1.3 percent, providing the biggest boost to the consumer discretionary index. The company said it sold 374,827 vehicles in June, up 5.8 percent from a year earlier, according to a regulatory filing today. It shipped 7 percent more cars overseas while domestic sales rose 0.1 percent, Hyundai said.
Samsung Electronics Co., the world’s top handset maker, fell 2.3 percent in Seoul, the most in a week. Apple Inc. won a court ruling blocking sales of Samsung’s Galaxy Nexus smartphone in the U.S. The Kospi index fell 0.1 percent.
Maruti Suzuki advanced 0.8 percent in Mumbai after saying sales grew 20 percent in June and exports climbed. The BSE India Sensex Index fell 0.2 percent.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose 3 basis points, or 0.03 percentage point, to 377, according to JPMorgan Chase & Co.’s EMBI Global Index.