Most emerging-market stocks rose as currencies gained after data reflecting moderate U.S. growth weakened the case for the Federal Reserve to increase near-zero interest rates that have supported demand for riskier assets.
The MSCI Emerging Markets Index was little changed at 971.47, with 410 stocks higher and 376 lower. The real led currency gains and the Ibovespa added 0.7 percent after a surprise increase in Brazil’s industrial output. The Shanghai Composite Index sank below the 4,000 level for the first time since April amid doubts over the effectiveness of government measures to support shares.
A Labor Department report showed U.S. job creation advanced, while wages stagnated and the size of the labor force receded. The data damped speculation that the Fed will move quickly to raise raise interest rates for the first time since 2006. While China’s securities regulator eased margin-trading rules and exchanges announced fee cuts overnight, the moves failed to revive confidence in the market.
“The U.S. payrolls data for the previous month was revised down, and that could support emerging equities and lead to an increase in emerging currencies against the dollar,” William Jackson, an analyst at Capital Economics Ltd. in London, said by phone. “China has been so volatile in recent months, and there is a continuing deterioration in sentiment when it comes to China.”
The developing-nation gauge has risen 1.6 percent this year and trades at 11.8 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has gained 2.2 percent in 2015 with a multiple of 16.2.
Five out of 10 industry groups in the emerging-markets measure rose on Thursday, led by consumer staples stocks. A Bloomberg gauge tracking 20 developing-nation currencies increased 0.3 percent. The premium investors demand to hold emerging-market debt over U.S. Treasuries widened three basis points to 346 basis points, according to JPMorgan Chase & Co. indexes.
The Labor Department report Thursday showed the addition of 223,000 jobs in June followed a 254,000 increase in the prior month that was less than previously estimated. The jobless rate fell to a seven-year low of 5.3 percent as more people left the labor force.
Greek voters are almost evenly split heading into a referendum on Sunday. A GPO poll cited by euro2day.gr said 47 percent leaned toward a “yes” vote, an endorsement of austerity and the international bailout. The “no” camp, the government’s position rejecting those terms, was 43 percent.
Russia’s dollar-denominated RTS Index rose 0.2 percent, while the Micex Index added 0.1 percent in Moscow. OAO Lukoil climbed the third time this week.
The real strengthened 1.7 percent against the dollar as Brazil’s industrial output rose 0.6 percent in May after a 1.2 percent decline in the prior month, the national statistics agency said in Rio de Janeiro.
The Turkish lira added 0.3 percent and the Russian ruble increased 0.6 percent. Brent crude gained 0.1 percent in London.
The Shanghai Composite slumped 3.5 percent to 3,912.767, the lowest close since April 3, while Hong Kong’s Hang Seng China Enterprises Index retreated 1.5 percent. China Railway Group Ltd. slid to its lowest close since March 31, after Daiwa Securities Co. downgraded the stock.
Egypt’s EGX 30 Index decreased 0.7 percent to its weakest level since May 17 after the country’s army suffered its deadliest blow in years of fighting Islamist militants in the Sinai peninsula.
Ukraine’s sovereign bonds rallied to a three-week high on optimism the country won’t default as the Finance Ministry and creditors prepare to hold direct debt-restructuring negotiations for the first time.