Emerging Stocks Rise Second Day as Consumer Shares Gain

Emerging-market stocks rose to a seven-month high as speculation U.S. politicians will reach a budget deal spurred risk appetite and support widened for policies allowing foreign investment in India’s retail market.

Hyundai Mobis Co., which got 21 percent of third-quarter sales from America, climbed to a six-week peak in Seoul. OAO Rostelecom, Russia’s state-run telephone operator, had the biggest gain in almost two months after a court ruling allowed investor Konstantin Malofeev to keep immunity from prosecution. Absa Group Ltd. headed for the highest close since June on Barclays Plc’s plan to increase its stake in the Johannesburg-based lender.

The MSCI Emerging Markets Index added 0.2 percent to 1,019.48 at 1 p.m. in London, heading for the highest close since May. A few dozen Republicans joined a bipartisan push to break an impasse between President Barack Obama and House Speaker John Boehner over taxes for the highest-earning Americans, signing a letter calling for openness to “all options.” The leader of India’s fourth-largest party in the parliament said she would support the government’s plan to allow foreign investment in retail.

“There has been growing optimism that a solution can finally be reached to resolve the fiscal cliff problem,” said Saharat Chudsuwan, who helps oversees $5 billion at Tisco Asset Management Co. in Bangkok.

The BSE India Sensitive Index, or Sensex, gained for a third day, adding 0.5 percent. The rupee strengthened 0.8 percent versus the dollar, the highest in a month. Russia’s Micex Index increased 0.3 percent, rising for a second day, and Brazil’s Bovespa index declined 0.5 percent.

China Stocks

The Shanghai Stock Exchange Composite Index lost 0.1 percent after posting its biggest gain in three months yesterday. Egypt’s EGX 30 Index plunged 4.9 percent, sliding for the first time in three days, after clashes yesterday between supporters and opponents of Mohamed Mursi in Cairo.

The Philippine Stock Exchange Index surged 1.3 percent, the most among Asian benchmark indexes, after exchange data showed overseas investors made the biggest purchases of the nation’s equities in two weeks. A report yesterday showed Philippine inflation slowed to a five-month low in November and central bank Governor Amando Tetangco said his bank’s monetary stance “remains appropriate.”

Gauges of industrial and material companies gained the most among the 10 industry groups in the MSCI Emerging Markets Index, rising 0.5 percent. The developing-nations measure has climbed 11.3 percent this year, compared with an 11.4 percent increase by the MSCI World Index. The emerging-markets index trades at 11.8 times estimated earnings, compared with the MSCI World’s multiple of 13.5, according to data compiled by Bloomberg.

Yield Spread

The extra yield investors demand to own emerging-market debt over U.S. Treasuries added two basis points, or 0.02 percentage point, to 287 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.

Hyundai Mobis, South Korea’s biggest auto-parts maker, rose 2.1 percent, its second day of gains.

Rostelecom surged 3.2 percent in Moscow. A court in Russia’s Smolensk region overturned a previous ruling, allowing Rostelecom investor Konstantin Malofeev to remain an elected official, keeping immunity from prosecution.

Absa jumped 4.8 percent to the highest since June 25 on a closing basis. Barclays Plc said it will increase its stake in the South African lender to 62.3 percent from 55.5 percent and combine most of its African operations with the Johannesburg-based lender to boost growth across the continent, according to Absa’s regulatory statement today. Absa will be renamed Barclays Africa Group Ltd., it said.

Gold Declines

AngloGold Ashanti Ltd., the world’s third-largest producer of the metal, fell 2 percent in Johannesburg, on course for the lowest close since Sept. 4. Gold declined for a third day.

Largan Precision Co. jumped 7 percent in Taipei, the most in four years, after sales last month more than doubled. Poly Real Estate Group Co., China’s second-biggest listed developer, gained 1.6 percent in Shanghai after November sales jumped 77 percent.

NHN Corp., South Korea’s largest Internet search-engine operator, tumbled 7.9 percent in Seoul, the most in a year and the biggest decline in the MSCI Emerging Markets Index. KTB Investment & Securities Co. said the company’s mobile games business performed worse than expected.

Infosys Ltd., India’s second-largest software exporter, sank 1.9 percent to the lowest close since Nov. 20 in Mumbai. Infosys will be replaced by Facebook Inc. on the Nasdaq-100 Index next week, Nasdaq OMX Group Inc. said yesterday.

(Corrects fund manager’s name in fourth paragraph of article published on Dec. 6.)
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