Emerging-market stocks rose from a two-year low and currencies strengthened as a rebound in China eased concern that the government won’t be able to contain a rout in the world’s second-largest equity market.
The Hang Seng China Enterprises Index halted a five-day drop and the Shanghai Composite Index rose the most since 2009 after regulators Wednesday banned major stockholders from selling stakes in listed companies. Stocks in developing Europe gained as Greece worked on an economic plan that it will propose in exchange for a bailout. Russia’s ruble strengthened 0.6 percent against the dollar as crude rallied the most in a month.
The MSCI Emerging Markets Index jumped 1.8 percent to 920.51 at 11:49 a.m. in New York. The International Monetary Fund cut its forecast for global growth this year, while expressing confidence that financial-market turbulence from China to Greece won’t cause widespread damage. A Bloomberg gauge tracking 20 developing-nation currencies increased 0.3 percent, rising from the lowest level since mid-March.
“Emerging-market stocks are rebounding because the Chinese authorities have announced more policies to help stabilize the stock market and because of optimism around a Greek deal,” Michael Wang, a London-based strategist at Amiya Capital LLP, said by e-mail. “It’s partly technical after the large selloff yesterday.”
Greece’s government submitted a new proposal it hopes will convince creditors to let the country stay in the European currency union. The proposals are set to be discussed at a summit Sunday to determine whether Greece will get a new bailout, or be forced to leave the single currency.
China has unveiled measures almost every night over the past two weeks to cap the rout as more than 1,400 companies were halted on mainland exchanges, locking sellers out of 50 percent of the market. The Shanghai Composite ended a two-day drop after about 600 stocks rose by the daily 10 percent limit.
Alibaba Pictures Group Ltd. and Alibaba Health Information Technology Ltd. jumped at least 36 percent following nine days of declines.
The premium investors demand to hold emerging-market debt over U.S. Treasuries narrowed 11 basis points to 354 basis points after increasing more than 20 basis points the prior four days, according to JPMorgan Chase & Co. indexes.
“The overall sentiment remains fragile with the Chinese market turbulence” and the Greek debt crisis, Koraphat Vorachet, an investment strategist at Capital Nomura Securities in Bangkok, said by phone.
The ruble gained the most in a week. Brent crude, the oil grade traders use to price Russia’s main export blend, gained 2.7 percent to $58.61. The Micex index advanced 1.2 percent.
The rand appreciated 0.5 percent, the third-best increase performance developing-country peers, and South African equities advanced 2.4 percent. The Turkish lira gained 0.4 percent, while the country’s stocks increased 2.4 percent, leading gains in eastern Europe. Markets in Brazil were closed for a holiday.
The MSCI emerging-market stock gauge ended a six-day, 7 percent decline. All 10 industry groups gained on Thursday, led by industrial companies. AviChina Industry & Technology Co. soared 33 percent in Hong Kong after its parent bought shares in the company.
Traders unloaded a record 112 billion yuan ($18 billion) of shares purchased with borrowed money on the Shanghai exchange Wednesday, the 13th straight day of declines.