Emerging-market stocks climbed from a two-year low as Chinese equities surged after authorities stepped up measures to stabilize the market. The ruble led currencies higher and Russian shares gained as Brent rebounded.
The Shanghai Composite Index jumped 3.7 percent, while the Micex Index jumped to the highest since mid-May in Moscow. The ruble gained 0.7 percent versus the dollar, the most among its developing-country peers. Raw-material producers advanced in Sao Paulo, offsetting a drop in Brazilian assets amid mounting concern that the country’s credit rating will be cut to junk.
The MSCI Emerging Markets Index increased 0.3 percent to 893.11. Chinese regulators restricted short-selling of stocks, the latest measure to prop up share prices and prevent market manipulation after an almost $4 trillion selloff. The Bloomberg Commodity Index rebounded from a 2002 low, halting a three-day decline.
“The news that some of the biggest brokers have banned short selling is helping the sentiment in Shanghai,” Hertta Alava, who helps oversee 350 million euros ($384 million) as the head of emerging markets at FIM Asset Management Ltd. in Helsinki, said by e-mail. “There is some rebound in commodity names after weakness yesterday.”
The Shanghai Composite climbed from a three-week low as volatility jumped to the highest level since 2009. Investors who borrow shares must now wait one day to pay back loans. Some Chinese brokerages including Citic Securities Co. halted their short-selling businesses after the regulators’ move.
Hong Kong’s Hang Seng China Enterprises Index gained 0.6 percent. Six out of 10 industry groups in MSCI’s emerging-markets measure rose, led by consumer discretionary and raw-material stocks. A gauge tracking developing-country currencies added 0.1 percent after a three-day decline.
Steelmaker Usinas Siderurgicas de Minas Gerais SA led gains among Brazilian raw-material companies, rallying 4.5 percent. The Ibovespa slumped 0.2 percent and the real weakened 0.6 percent against the dollar. Concern has been building that Brazil will lose its investment-grade credit rating amid evidence of a widening political corruption scandal.
The ruble climbed for the first time in four days after falling to the lowest level since February on Monday as oil gained 0.9 percent and Citigroup Inc. lifted the nation’s currency and debt to neutral from underweight.
Brent traded near $50 a barrel after reaching a six-month low amid speculation Iranian supplies will exacerbate a global surplus as demand from the U.S. to China slows. Russia derives about 50 percent of its revenue from crude and gas.
South Korea’s Kospi index rose 1 percent as Korean Air Lines Co. surged 11 percent, the most since October 2008.
MSCI’s developing-nation gauge has declined 6.6 percent this year and trades at 11.2 times projected 12-month earnings, data compiled by Bloomberg show. That compares with a multiple of 16.4 for the MSCI World Index, which has risen 2.9 percent.
The premium investors demand to hold emerging-market debt over U.S. Treasuries narrowed six basis points to 367 basis points, according to JPMorgan Chase & Co. indexes.