Emerging-market stocks rose from a two-month low, led by automakers, as reports signaled increased confidence in the global economic recovery and investors speculated China will take steps to support equities.
Hyundai Motor Co. advanced for the first time in three days in Seoul, while Guangzhou Automobile Group Co. rallied the most in seven weeks in Hong Kong after UBS AG raised its rating on the stock. OAO Bashneft, billionaire Vladimir Evtushenkov’s crude producer, gained in Moscow and Ford Otomotiv Sanayi AS climbed the most in 12 weeks in Istanbul after profit beat analysts’ estimates. Desarrolladora Homex SAB plunged in Mexico City, leading homebuilders lower.
The MSCI Emerging Markets Index added 0.4 percent to 1,046.56 in New York after falling 1.1 percent yesterday as Italy’s election revived European debt concerns. Data today indicated economic confidence in the euro area increased more than forecast in February, while orders for U.S. durable goods and pending home sales beat estimates last month. China is studying allowing the housing provident fund to invest in equities, China National Radio said.
“The durables data and pending home sales helped the market get going today,” Nick Chamie, global head of foreign exchange strategy and emerging markets research at RBC Capital Markets, said by phone from Toronto. “They’re giving people improved confidence that the most cyclical sectors in the U.S. economy are strengthening.” China adding investments could also be helping boost sentiment and be supportive to Chinese stocks, Chamie said.
All 10 industry groups in the MSCI Emerging Markets Index gained, with gauges of utilities, industrials and consumer discretionary companies leading advances. The 21 countries in the developing-nations index send about 26 percent of their exports to the European Union on average and 17 percent to the U.S., data compiled by the World Trade Organization show.
Orders for U.S. durable goods excluding transportation gear climbed 1.9 percent in January, exceeding the 0.2 percent median forecast of economists surveyed by Bloomberg. Contracts to purchase previously owned homes climbed to the highest since April 2010. Reports on new-home sales and consumer sentiment for the world’s largest economy also beat projections yesterday.
The iShares MSCI Emerging Markets Index exchange-traded fund, the ETF tracking developing-nation shares, rose 1.1 percent to $43.41. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, fell 7.2 percent to 18.79.
An index of executive and consumer sentiment rose to 91.1 from a revised 89.5 in January, the European Commission said. Economists had forecast an increase to 89.9, according to the median of 29 estimates compiled by Bloomberg. Italy reached its target in a bond sale today as the country’s political stalemate forced the Treasury to offer higher yields.
“The outlook for emerging Europe’s exporters has improved a little,” Neil Shearing, chief emerging-market economist at Capital Economics Ltd. in London, said in an e-mailed report today. “Much still hinges on developments in the euro zone, where the debt crisis is far from resolved. This will continue to cloud the outlook for emerging Europe.”
Brazil’s Bovespa index advanced 0.6 percent as homebuilder Gafisa SA rose 5.6 percent amid speculation that policy makers may wait longer before raising interest rates from record lows, benefiting companies that depend on credit.
The IPC Index gained 0.7 percent in Mexico City. Homex plunged 7.7 percent, leading homebuilders lower after a surprise fourth-quarter loss. Trading volume on the stock was 3.2 times the three-month daily average.
Russia’s Micex Index rose 0.2 percent as Bashneft added 2.1 percent. OAO Gazprom, Russia’s biggest energy producer, gained 0.8 percent.
Poland’s WIG20 Index added 0.9 percent on trading volume that was 23 percent lower than the 30-day average. PGE SA jumped 4.1 percent in Warsaw as Citigroup Inc. and Bank Zachodni WBK SA recommended buying shares in the country’s biggest utility.
Ford Otomotiv, a Turkish carmaker co-owned by Ford Motor Co. and Koc Holding AS, rose 5.9 percent after the company said 2012 net income rose 2 percent to 675 million liras ($374 million).
South Africa’s benchmark stock index slid 0.7 percent, falling for a second day, and the rand slipped 0.5 percent against the dollar. The government cut its economic growth forecast for 2013 to 2.7 percent from 3 percent.
India’s S&P BSE Sensex index climbed 0.7 percent, the most in a month, after Finance Ministry advisers said economic growth is set to recover. India’s rupee advanced 0.4 percent versus the dollar.
Chinese stocks traded in New York rose for a second day after AutoNavi Holdings Ltd., a digital map content provider, rallied 2.6 percent on better-than-estimated earnings.
Sinopec Shanghai Petrochemical Co. jumped 11 percent in Hong Kong, the most since April 2009 and the biggest advance in the MSCI emerging markets index, after Bank of America Merrill Lynch upgraded the stock to buy.
The Shanghai Composite Index rose 0.9 percent from a one-month low, while the Hang Seng China Enterprises Index of Chinese companies traded in Hong Kong climbed 0.4 percent. The Jakarta Composite Index added 1.1 percent to a record.
Guangzhou Automobile rose 6 percent in Hong Kong after UBS raised the stock to neutral, citing an improving outlook for the industry.
Hyundai Motor advanced 0.7 percent. The company agreed to settle a group of lawsuits by U.S. customers who said they were misled into buying the South Korean carmaker’s vehicles because it overstated their fuel economy. Affiliate Kia Motors Corp. added 1.7 percent.
The emerging-markets index has fallen 0.8 percent this year, compared with a 4.6 percent gain in the MSCI World Index. The developing-nations index trades at 10.2 times projected 12-month earnings, compared with the MSCI World’s 13.2 times, data compiled by Bloomberg show.
The extra yield investors demand to hold emerging-market debt over U.S. Treasuries fell four basis points, or 0.04 percentage point, to 287 basis points, according to the JPMorgan Chase & Co.’s EMBI Global Index.