Emerging-market stocks rose, following the longest weekly rally in a month, as state-controlled oil producer Petroleo Brasileiro SA led Brazil’s Ibovespa to the biggest gain among world equity indexes.
The MSCI Emerging Markets Index rose 0.2 percent to 1,004.15. The Ibovespa advanced to a four-month high as President Dilma Rousseff’s re-election bid lost support after almost three-quarters of those surveyed called for a change in policy amid slower growth. Petrobras climbed 6.6 percent. Russia’s dollar-denominated RTS Index fell the most among 94 gauges, while the ruble extended this year’s slide to 7.8 percent on concern the crisis in Ukraine will escalate.
Brazilian President Rousseff’s support fell to 38 percent from 44 percent in February in a Datafolha poll that pitted her against opposition candidates Aecio Neves and Eduardo Campos. Rousseff, who is expected to run for a second term in October, has been struggling to contain above-target inflation, fuel economic growth and shrink a budget deficit that last month led to Brazil’s first downgrade in a decade.
The Brazilian election “could be the springboard the country needs to reignite and continue to attract external capital,” Michael Mullaney, who oversees $11.3 billion as Boston-based chief investment officer for Fiduciary Trust Co., said by phone. “We don’t want to have exposure to things like the BRICs, we’d rather be much more country specific. We’re nibbling at emerging markets right now in our portfolios.”
The iShares MSCI Emerging Markets Index ETF advanced 0.4 percent to $41.48. The premium investors demand to own emerging-market debt over U.S. Treasuries rose 0.02 percentage point to 292 basis points, according to JPMorgan Chase & Co.
Russia’s stocks and the ruble sank as pro-Russian protesters in eastern Ukraine seized government buildings and the nation’s premier accused Russia of seeking a “territory of slavery.” The Crimea region joined Russia after a vote last month, prompting U.S. and European Union sanctions.
“That is certainly a worrisome development,” Peter Jankovskis, who helps oversee $3.5 billion as co-chief investment officer of Lisle, Illinois-based OakBrook Investments LLC, said by phone. “People had been hoping the situation would be contained to Crimea and it looks like it may be spreading. It’s a very broad geopolitical risk and could promote additional sanctions.”
Brazil’s Ibovespa rose 2.1 percent as Petrobras rallied for a second day. Cosmetics seller Natura Cosmeticos SA was the best performer among consumer stocks as data showed slower-than-forecast inflation. Planemaker Embraer SA slumped to a eight-week low as the real climbed amid speculation that a Rousseff defeat would be beneficial to the economy.
Hong Kong stocks fell, with the benchmark index posting a second day of declines, as casinos slipped and Tencent Holdings Ltd. dropped amid a global selloff in technology shares. Mainland markets were closed for a holiday.