Emerging Stocks End 12-Day Streak of Losses as Ibovespa Rallies

Updated on

Emerging-market stocks climbed for the first time in 13 days, rising from the lowest valuations in more than two months amid speculation Greece will reach a deal with creditors and Brazilian raw-material exporters rallied.

Iron-ore producer Vale SA ended a four-day drop in Sao Paulo as its chief executive officer forecast a pickup in Chinese demand. Turkish stocks and the lira rose after the nation’s economy grew faster than estimated. The ruble jumped 2.1 percent, leading gains among developing-nation currencies. PT Unilever Indonesia rose 4.2 percent as the Jakarta Composite Index rebounded from the lowest level in 11 months.

The MSCI Emerging Markets Index rose 0.7 percent to 977.85. A gauge of 20 developing-nation currencies added 0.6 percent, and the yen rose the most in three months after Bank of Japan chief Haruhiko Kuroda said further declines are “unlikely.” People familiar with Germany’s position said it may be satisfied with Greece committing to at least one economic reform sought by creditors to open the door to bailout funds.

There is “a brief relief rally after almost two weeks of straight losses,” Bernd Berg, an emerging-market strategist at Societe Generale SA in London, said by e-mail. “The weaker dollar after Koruda’s comments and some small hope that we might see a Greece solution on the horizon is triggering this mini relief rally in emerging-market currencies.”

The developing-nation index has gained 2.3 percent this year and trades at 11.9 times projected 12-month earnings, near the lowest level since March 27, data compiled by Bloomberg show. Its 14-day relative strength index fell to 21 on Tuesday, below the 30 level that indicates to some investors a security is oversold. The MSCI World Index has risen 3.9 percent in 2015 and is valued at a multiple of 16.6.

Industry Groups

All 10 industry groups in MSCI’s emerging-markets measure gained Wednesday, led by utility stocks. Unilever Indonesia advanced the most since April 28, helping the Jakarta Composite add 0.7 percent.

Vale rallied 4.8 percent. The global iron-ore market is set to tighten in the second half of the year as China imports more and produces less, Chief Executive Officer Murilo Ferreira said at a conference. Brazil’s Ibovespa equity benchmark rose 2 percent.

The Borsa Istanbul 100 Index jumped 2.1 percent and the lira strengthened 0.7 percent against the dollar. Turkey’s gross domestic product expanded 2.3 percent in the first quarter, compared with 2.6 percent during the previous three months, the statistics agency said on its website on Wednesday. The median estimate in a Bloomberg survey of 15 analysts was 1.7 percent.

Ruble Rises

The ruble climbed for a fourth day and Malaysia’s ringgit increased 0.5 percent as crude extended its biggest advance this month.

Ukraine’s $500 million of notes due September tumbled after the International Monetary Fund said it can keep supporting the country even if it stops payments to bondholders. The bonds, which are the first of Ukraine’s international obligations to come due, had their biggest decline in almost three months.

The Shanghai Composite Index slid 0.2 percent as MSCI Inc. held off from adding mainland equities to its benchmark indexes. The Hang Seng China Enterprise Index fell 1.8 percent in Hong Kong.

The premium investors demand to hold emerging-market debt over U.S. Treasuries narrowed two basis points to 339 basis points, according to JPMorgan Chase & Co. indexes.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE