Emerging-market stocks rose the most in a week as data showed manufacturing in China and the U.S. expanded, boosting the outlook for the world’s largest economies.
Petrochemicals maker Braskem SA led Brazilian producers higher amid a rally in global commodities prices. Titan Industries Ltd., India’s largest branded-jewelry maker, surged to a record high after second-quarter profit beat estimates. Zoomlion Heavy Industry Science & Technology Co., China’s second-biggest maker of construction equipment, gained 3.4 percent in Hong Kong. Hyundai Motor Co. slid to the lowest in almost eight months on speculation it may need to recall some vehicles in the U.S.
The MSCI Emerging Markets Index gained 0.4 percent to 999.63 at the close of trading in New York. A purchasing managers’ index in China signaled that manufacturing expanded for the first time in three months, adding to signs the economy is rebounding after a seven-quarter slowdown. The Institute for Supply Management’s U.S. factory index rose to 51.7 in October from 51.5 a month earlier, surpassing a median estimate of 51 by 88 economists surveyed by Bloomberg.
“The Chinese PMI was better than expected, above 50, which is the threshold between contraction and expansion. The market is looking to China, and the PMI came in handy,” said Darwin Dib, the chief strategist at CM Capital Markets Asset Management in Sao Paulo. The U.S. PMI and jobs numbers were also “slightly above forecast,” Dib said.
Fewer Americans than forecast filed for jobless claims last week, and companies expanded payrolls in October by the most in eight months, data from the Labor Department and the ADP Research Institute showed today.
EM ETF Rises
The iShares MSCI Emerging Markets Index, an exchange-traded fund of developing-nation stocks, gained 1.6 percent to $41.82 in New York, after slumping 0.4 percent in October. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, dropped 6.3 percent, the most in more than a month.
Brazil’s Bovespa gained 2.3 percent, the most in seven weeks, as gauges of financial, information technology and material stocks advanced more than 2.2 percent. Moscow’s Micex Index rose 0.4 percent and Indian stocks advanced 0.3 percent, led by consumer shares.
The Shanghai Composite Index surged 1.7 percent, the most in three weeks and the biggest gain among benchmark indexes in Asia Pacific. Taiwan’s Taiex index rose 0.2 percent, erasing an earlier loss of 1.6 percent, on speculation government funds may have supported stocks after the decline in the morning.
The Kuwait Stock Exchange Index slid 1.9 percent to its lowest close since August 2004, after the Interior Ministry said it rounded up several “rioters and inciters of violence” late last night during a protest march against the detention of an opposition activist. The Jakarta Composite Index dropped as much as 1.1 percent and ended down 0.3 percent, after inflation accelerated in October.
Turkish bonds rose, with yields on two-year benchmark debt falling for a fourth day to the weakest level since January 2011, after the Treasury cut its domestic borrowing target for November. The Czech koruna was the biggest decliner among emerging-market currencies tracked by Bloomberg after the central bank cut its main policy rate to close to zero. The Hungarian forint strengthened 0.6 percent versus the euro in its third day of gains.
Gauges of utility and financial stocks in the MSCI Emerging Markets Index gained at least 0.8 percent, the most among 10 industry groups. MSCI’s measure of developing-nation equities has climbed 9.1 percent this year, trailing an 11 percent increase in the MSCI World Index of developed countries. The emerging-markets measure trades at 11.4 times estimated profit, compared with the MSCI World’s 13.3, according to data compiled by Bloomberg.
Trading volumes were higher than average in China, while they fell in Russia, Brazil, India and South Korea. About 23 percent more shares of Shanghai Composite Index companies changed hands today compared with the 30-day average, according to data compiled by Bloomberg. Volume was 17 percent lower than the average for the Micex Index and 28 percent for the Kospi index. It was 8 percent higher for the BSE India Sensitive Index, and 4.8 percent lower for the Bovespa index.
The National Bureau of Statistics and China Federation of Logistics and Purchasing’s PMI index rose to 50.2 in October from 49.8 in September, matching the median estimate of 30 economists surveyed by Bloomberg. A number above 50 indicates expansion.
Manufacturing in the U.S. expanded in October at a faster pace than projected as orders and production picked up. A report from ADP Research Institute showed that U.S. companies added 158,000 jobs in October, more than forecast.
Zoomlion added 3.4 percent, the biggest jump since Oct. 18, gaining for a second day. Braskem rose 5.8 percent on the Bovespa. Pulp producer Fibria Celulose SA gained 4.5 percent, the most in seven weeks. The UBS Bloomberg CMCI index of 27 raw materials rose 0.4 percent.
Titan Industries gained 10 percent to a record high after reporting second-quarter profit of 1.8 billion rupees, beating a median estimate of 1.7 billion by analysts. The company was raised to “Buy” from “Hold” at Antique Stock Broking by equity analyst Abhijeet Kundu.
Hyundai Motor, South Korea’s largest automaker, dropped 3.8 percent to the lowest close since March 12, dragging consumer shares. Speculation that the company may announce a recall in the U.S. drove the shares lower, Lee Sang Hyun, analyst at NH Investment & Securities Co., said by phone. Hyundai Motor declined to comment in an e-mail response to questions.
OAO Novatek slid 7.8 percent in Moscow trading after the Russian natural-gas producer lost a gas supply contract to OAO Rosneft, Russia’s biggest oil producer. Rosneft jumped 5.9 percent to the highest since June 2011 as it won a contract to supply natural gas to state-run OAO Inter RAO UES’s power generators from 2016, replacing Novatek, according to e-mailed statements by Rosneft and Inter RAO.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell four basis points, or 0.04 percentage point, to 292, according to JPMorgan Chase & Co.’s EMBI Global Index.