Most emerging-market stocks climbed as raw-material producers rallied amid speculation that China will do more to support growth in the world’s second-largest economy.
The MSCI Emerging Markets Index declined 0.1 percent to 1,004.43 with 406 stocks rising and 250 falling. A gauge of commodity companies rose the most among 10 industry groups, increasing 0.6 percent to a one-month high. Posco, South Korea’s biggest steelmaker, surged 4.2 percent. The Shanghai Composite Index rallied to a seven-year high.
The Shanghai gauge has soared 92 percent over the past 12 months on speculation policy makers will continue to lower borrowing costs. Federal Reserve Bank of Atlanta President Dennis Lockhart said Monday that while recent U.S. economic weakness probably won’t persist, he favors pushing out the central bank’s first rate increase beyond the next two meetings.
“Local sentiment in China remains very strong, mainly on easing expectations,” Maarten-Jan Bakkum, a senior emerging-markets strategist at NN Investment Partners in The Hague, said by e-mail. Some markets are retreating following strong gains driven by bets the Fed will delay raising interest rates, he said.
The Ibovespa retreated less than 0.1 percent as most Brazilian stocks declined, ending a three-day advance in Sao Paulo. The Micex Index slipped 0.3 percent in Moscow.
A gauge of developing-nation currencies fell 0.2 percent, ending a four-day gain. The Turkish lira led losses with a 1.2 percent decline.
The MSCI emerging-market stock gauge has gained 5 percent this year and trades at 12.2 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has advanced 3 percent in 2015 and is valued at a multiple of 16.8.
Three out of 10 industry groups in the developing-nation index climbed. Posco surged the most since Nov. 24. The steelmaker may post its best first-quarter operating profit since 2011, Korea Investment Holdings Co. said in a report yesterday. The Standard & Poor’s GSCI index of 24 raw materials gained 0.4 percent in its second straight advance.
The Shanghai Composite surged 2.5 percent as large-company shares jumped. Mainland and Hong Kong markets were closed on Monday, with the latter set to resume trading on Wednesday. CSR Corp. and China CNR Corp. both soared 10 percent after the two train makers said their merger was cleared by regulators.
India’s S&P BSE Sensex Index closed little changed at the highest level since March 18. Governor Raghuram Rajan kept the benchmark repurchase rate at 7.50 percent, the Reserve Bank of India said in a statement in Mumbai on Tuesday, a move predicted by 33 of 42 economists in a Bloomberg survey. The rest saw a cut to 7.25 percent.
The premium investors demand to own emerging-market debt over U.S. Treasuries was unchanged at 358 basis points, according to JPMorgan Chase & Co. indexes.