Emerging-market stocks gained for the first time in three days, led by information technology companies. Utility and material producers fell, following commodities lower, amid the U.S. budget deadlock.
Samsung Electronics Co., the world’s biggest maker of smartphones, added 2.2 percent in Seoul after Taurus Investment Securities said its earnings will beat estimates. OAO Rosneft, Russia’s largest oil producer, led gains in Moscow after signing loan agreements for $16.8 billion to finance the acquisition of TNK-BP. OAO Mechel, Russia’s largest coking-coal producer, dropped the most in six weeks.
The MSCI Emerging Markets Index rose 0.1 percent to 1,043.73 in New York, with 326 shares advancing, 303 retreating and 192 unchanged, while markets from Brazil to Romania were closed for the Christmas holiday. U.S. lawmakers said last week they were losing confidence that Congress and President Barack Obama can reach a deal to avoid more than $600 billion in tax increases and spending. The 21 nations in the developing-nations gauge send about 17 percent of their exports to the U.S. on average, World Trade Organization data show.
“How investors view progress, or the lack thereof, will dictate how all markets close the year and the stance toward risk assets when trading resumes on Wednesday.” Chris Weafer, chief strategist at Sberbank Investment Research in Moscow, wrote in an e-mailed note today.
The developing-nations measure has risen 14 percent this year, outpacing a 13 percent increase by the MSCI World Index. The emerging-markets index trades at 12 times estimated earnings, compared with the MSCI World’s multiple of 13.8, according to data compiled by Bloomberg.
Egypt’s credit rating was cut to the same junk level as Greece by Standard & Poor’s on escalating political tension that may render aid to the North African nation from the International Monetary Fund “inactive.” The most-populous Arab country’s rating was lowered by one level to B-, six steps below investment grade, with a negative outlook, S&P said today.
Stock markets in Jakarta and Manila are closed for public holidays today, while markets in Hong Kong and South Africa finished trading at noon local time. Bourses in Brazil, the Czech Republic, Hungary, Poland and Romania are closed.
In Asia, Hong Kong, India, South Korea, Malaysia, Indonesia, Pakistan and the Philippines will be shut for holidays tomorrow, while China, Taiwan, Thailand, Vietnam and Sri Lanka will be open.
Russia’s Micex Index gained less than 0.1 percent as oil traded near the lowest level in almost a week in New York, while the ruble strengthened versus the dollar ahead of tax payments.
The BSE India Sensitive Index advanced for the first time in three days, adding less than 0.1 percent, as software exporters and drugmakers led the increase. The benchmark index in Turkey added 0.8 percent.
The Romanian leu gained 0.6 percent versus the euro, the strongest level since May. Prime Minister Victor Ponta’s government won parliamentary approval, allowing the new cabinet to progress a 2013 budget and start talks for a new international precautionary credit. The parliament will probably vote on the budget at the end of January, Ponta told reporters in Bucharest on Dec. 22.
OAO GMK Norilsk Nickel dropped 1.3 percent as the world’s largest producer of nickel and palladium may pay as much as $9 billion in dividends over the next three years, according to United Co. Rusal, owners of a 25 percent stake in Norilsk, according to data compiled by Bloomberg.
Borusan Mannesmann Boru Sanayi ve Ticaret AS, a Turkish manufacturer of pipes, rose 2.6 percent, the biggest gain since Aug. 28. The company plans to invest $150 million in a U.S. plant by the second half of 2014, it said in a statement to the Istanbul Stock Exchange today.
First Gulf Bank PJSC added 0.9 percent, closing at the highest since August 2008. The Abu Dhabi-based lender will probably post the fastest loan growth in the United Arab Emirates in 2013, helping boost profit, EFG-Hermes Holding SAE said this month. Net income this year is set to grow 6 percent to 3.94 billion dirhams (1.07 billion), according to the average estimate of 11 analysts compiled by Bloomberg.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries narrowed three basis point, or 0.03 percentage point, to 265 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.
“Most investors are very cautious” about the U.S. budget negotiations, Sasikorn Charoensuwan, head of research at Phillip Securities (Thailand) Pcl in Bangkok, said by phone today. “The concern should hinder any aggressive equity investments in the emerging markets.”
Taiwan’s Taiex Index dropped less than 0.1 percent, with trading volumes 23 percent below the 30-day average at the close, while the FTSE Bursa Malaysia KLCI Index advanced 0.6 percent with volumes 44 percent lower than the 30-day average. China’s Shanghai Composite Index gained 0.3 percent.
A gauge of technology companies rose 0.8 percent, the best performance of 10 industry groups and the most since Dec. 13.
Samsung rebounded in Seoul from its biggest decline in almost four months on Dec. 21. Earnings in the fourth quarter will beat market consensus on “strong” smartphone sales, Taurus Investment said in a report today.
Innolux Corp. slid 6.9 percent in Taipei and AU Optronics Corp. slumped 6.7 percent. Reduced orders from Chinese television makers will push LCD makers to cut production, the Economic Daily reported. AU Optronics’s spokeswoman Hsiao Yawen declined to comment to Bloomberg News, while Innolux’s spokesman CH Lin was not available for comment.