Emerging-market stocks rose to a six-month high, boosted by industrial shares, as a gauge of Chinese companies traded in Hong Kong posted the biggest advance in three years.
The MSCI Emerging Markets Index added 1.5 percent to 1,021.05, rising for an eighth straight day. China CNR Corp. and CSR Corp. climbed to records in Hong Kong as the trainmakers got approval to merge. Brazil’s real strengthened 2.6 percent against the dollar, leading developing-nation currencies higher.
Hong Kong stocks jumped as their Chinese peers extended a world-beating performance on bets the government will do more to support growth. China needs strong support from the equity market as the economy faces relatively large pressures this year, the official Xinhua News Agency reported on Tuesday.
China “has endorsed a rising stock market as necessary for economic recovery,” Michael Wang, a strategist at Amiya Capital LLP in London, said by e-mail. “The government wants to see the stock market rise and will take appropriate steps to support it.”
The developing-nation gauge has risen 6.8 percent this year and trades at 12.3 times projected 12-month earnings, the most expensive since April 2010, data compiled by Bloomberg show. The MSCI World Index has gained 3.3 percent in 2015 and is valued at a multiple of 16.8.
Emerging-market equities have gained 6.6 percent in the past eight days on bets the Federal Reserve will delay raising borrowing costs. Minutes of the Fed’s March meeting released Wednesday indicated that some officials argued that policy makers should delay raising interest rates until later in the year, supporting higher-yielding assets from emerging markets.
The real gained 2.5 percent against the dollar. A Bloomberg gauge of 20 emerging-market currencies advanced 0.5 percent to the highest level since late February.
Russia’s ruble appreciated 2.5 percent in its sixth straight advance, the longest rally since late November. The Micex Index fell 0.7 percent. Oil, Russia’s biggest export, pared its best two-day rally since February as data showed U.S. crude inventories jumped the most in 14 years.
All 10 industry groups in the developing-nation stock gauge climbed. China CNR and CSR soared more than 40 percent. The two stocks resumed trading on Wednesday after they were halted on March 30, pending regulatory approval for the merger.
The Hang Seng China Enterprises Index jumped 5.8 percent after a three-day holiday. The Shanghai Composite Index briefly surpassed 4,000 for the first time since 2008.
Net purchases of Hong Kong shares through the city’s mainland exchange link surpassed the daily record within the first half hour of trading Wednesday. The Shanghai Composite added 0.8 percent to the highest closing level since March 2008.
Chinese stocks have climbed too fast and a 20 percent retreat is “very possible,” Mark Mobius, who oversees about $40 billion as the executive chairman of Templeton Emerging Markets Group, told reporters in Hong Kong.
The premium investors demand to own emerging-market debt over U.S. Treasuries narrowed five basis points to 352 basis points, according to JPMorgan Chase & Co. indexes.