Emerging-market stocks rose, extending a weekly rally, as speculation Brazilian President Dilma Rousseff is losing support in a re-election bid drove the Ibovespa to the biggest advance among global equity gauges.
The MSCI Emerging Markets Index added 0.7 percent to 1,003.39, bringing its advance for the week to 1 percent. Brazil’s Ibovespa jumped to a five-month high, led by Petroleo Brasileiro SA. The Borsa Istanbul 100 Index rallied as the central bank offered more funding to lenders two days after Governor Erdem Basci said borrowing costs may drop. Russia’s ruble slid amid concern the crisis in Ukraine will escalate.
President Rousseff’s re-election bid has suffered setbacks in all surveys from different pollsters released in the past month amid faster inflation and poor public services. Sensus Data World Pesquisa e Consultoria S/C Ltda. may publish a poll on the elections tomorrow, according to the Superior Electoral Court. While the gain in the measure for emerging-market stocks brought its valuation to 10.5 times estimated earnings, the gauge still trades below the multiple of 14.8 for developed economies.
“These are depressed markets,” Timothy Ghriskey, chief investment officer at New York-based Solaris Asset Management LLC, which helps manage about $1.5 billion in assets, said by phone. “Brazil is certainly among those, so there’s opportunity there. It’s not a question of if to invest in them, it’s a question of when.”
Investors also watched data showing U.S. employers boosted payrolls in April by the most in two years and the jobless rate plunged to the lowest since the collapse of Lehman Brothers.
The iShares MSCI Emerging Markets Index ETF added 0.6 percent to $41.61. The premium investors demand to own emerging-market debt over U.S. Treasuries fell 0.01 percentage point to 295 basis points, according to JPMorgan Chase & Co.
Brazil’s Ibovespa extended this week’s advance to 3.1 percent. State-run oil producer Petrobras jumped 6.2 percent. The real has gained 6.3 percent this year, partly on bets that a change in the administration will do more to support growth.
The Borsa Istanbul 100 Index jumped to a five-month high, led by banks. The central bank lent 20 billion liras ($9.5 billion) at an auction of one-week repurchase agreements, the highest since April 9.
Russian bonds yields surged to a seven-week high and the ruble extended this year’s slide to 8.3 percent on concern President Vladimir Putin will send troops into Ukraine as the government in Kiev engaged separatists in the nation’s east.
President Barack Obama and German Chancellor Angela Merkel said the scheduled May 25 elections in Ukraine are the next trigger point determining whether the U.S. and its allies slap broader economic sanctions on Russia. The United Nations Security Council held an emergency meeting at Russia’s request.
Hong Kong stocks rose, with the city’s benchmark index posting its first weekly gain in three weeks. The city’s market was shut yesterday for a holiday and mainland bourses are closed today.