Emerging-market stocks capped the biggest three-day jump since September, currencies rose and bond yields dropped as South Korea raised its economic growth forecast and India posted a narrower current-account deficit.
The MSCI Emerging Markets Index rose 1.9 percent to 919.46. Samsung Electronics Co., the world’s largest maker of smartphones, drove South Korea’s Kospi Index to the biggest advance in nine months. South Africa’s rand led gains in 18 out of the 24 developing-nation currencies tracked by Bloomberg, while the nation’s bond yields tumbled. The premium investors demand to own emerging-market debt over U.S. Treasuries slumped for a third day, according to JPMorgan Chase & Co.
The gauge of emerging-market stocks extended a three-day gain to 4.1 percent. South Korea’s current-account surplus widened to a record and the Finance Ministry revised its 2013 growth estimate to 2.7 percent. India released figures showing a narrower-than-estimated current-account deficit a day earlier than expected after the rupee touched a record low yesterday. Stocks also rose after a rebound in U.S. consumer spending, a drop in jobless claims and as an index of pending home sales jumped to the highest since 2006.
“Emerging markets have been battered due to deceleration of global growth, but over the last several days, that pressure subsided,” Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co., said in a phone interview. His firm oversees about $130 billion. “The emerging markets will improve if global growth starts to re-accelerate.”
All 10 groups in the MSCI Emerging Markets Index rose today led by technology shares. The broad measure is poised for a second quarterly loss, the longest losing streak since September 2011, after slumping 11 percent since the end of March. The gauge is trading at 9.6 times estimated earnings, compared with a valuation of 13 for the MSCI World Index of developed markets.
The iShares MSCI Emerging Markets Index exchange-traded fund rose 2 percent to $38.28. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, retreated 0.8 percent to 28.29.
Brazil’s Ibovespa advanced for a third day as paper maker Klabin SA followed commodities prices higher amid signs that the global economy is improving.
The Micex Index lost 0.5 percent in Moscow, extending its slump this quarter to 8.7 percent. OAO Gazprom, the natural gas export monopoly, slid after lowering its 2013 dividend forecast.
Poland’s WIG20 Index tumbled to the lowest level since Aug. 2 as PGE SA fell to a record as the nation’s biggest power utility signed an agreement to resume an 11.6 billion-zloty ($3.5 billion) project to expand its Opole plant and the state backed a cut in its dividend by more than a half.
The Borsa Istanbul Stock Exchange National 100 Index surged 2.6 percent, while benchmark stock gauges in the Czech Republic and Hungary added more than 0.3 percent.
South African bond yields declined as the cost of goods leaving factories slowed and foreigners purchased more local debt than they sold. The rand gained 1.5 percent.
The rupee strengthened 0.9 percent to 60.2 per dollar at the close in Mumbai. The current account is the broadest measure of trade, tracking goods, services and investment income. The central bank usually publishes the figures on the last working day of the quarter and the surprise release is probably aimed at calming nerves after the rupee sank to an all-time low yesterday, Yes Bank Ltd. said.
The Kospi Index climbed 2.9 percent as Samsung jumped 6.2 percent in Seoul, the most since December 2011. China’s stocks fell a seventh day on concern this month’s jump in funding costs will curb growth. The Shanghai Composite Index and the Hang Seng China Enterprises Index each fell 0.1 percent. Coal producer China Shenhua Energy Co. slid 1.9 percent, sending a gauge of energy shares down a record 13th day.
The Philippine Stock Exchange Index climbed 3.4 percent, extending a two-day rally to 9.3 percent, the most since October 2008. SM Investments Corp., the nation’s biggest company by market value, rose 4.9 percent after its chief financial officer said earnings growth may exceed a 14 percent target this year.
The extra yield for emerging-market debt over U.S. Treasuries declined six basis points, or 0.06 percentage point, to 350 basis points, according to JPMorgan’s EMBI Global Diversified Index.