Emerging Stocks Rise Most in Three Weeks on China; Ruble Climbs

  • Equity rally trims the worst start to a year since 1998
  • Developing-nation currency gauge up for first time this year

Emerging-market stocks gained the most in three weeks and currencies halted an eight-day decline after data showed Chinese exports beat estimates and gains in commodity prices lifted producers.

The MSCI Emerging Markets Index gained 0.9 percent to 729.56. All 10 industry groups advanced. A gauge of raw-material companies increased for the first time in six days as the Bloomberg Commodity Index advanced this most this year. South Africa’s rand led currencies higher as a gauge of 20 developing-nation exchange rates against the dollar rose from a record low.

The stock rally trimmed the worst start of a year for emerging-market equities since 1998 amid signs a rout that had wiped more than $5 trillion from global share values this year was abating. China’s trade data and policy makers keeping the yuan reference rate little changed, after cuts last week by the most since August, helped ease investors’ concern that the country’s economic slowdown is worsening.

“The relative stability of the yuan over the last three days has helped sentiment,” said Michael Wang, a strategist at hedge fund Amiya Capital in London, who prefers Indian, Indonesian and Russian shares. “It allays some of the concerns surrounding Chinese and global growth.”

China’s trade surplus swelled to $60.09 billion in December from $54.1 billion in November, compared with $51.3 billion predicted by economists in a Bloomberg survey. Exports in U.S. dollar terms fell 1.4 percent from a year earlier, the smallest decline since June and less than the 8 percent drop analysts predicted.

Stocks

The MSCI Emerging Markets Index has dropped 8.1 percent this year, pushing its 14-day relative strength index to 19.7 this week, the lowest reading since August and less than the level of 30 that some analysts say signals a rebound is imminent. Developing-nation stocks are valued at 10.5 times 12-month projected earnings, compared with a multiple of 14.7 for the MSCI World Index.

Turkish banks led the Borsa Istanbul 100 Index 1.1 percent higher. Investors downplayed the prospect of increased geopolitical risk after a suicide bombing killed 10 in a popular tourist area on Tuesday. Poland’s WIG20 Index rose 1.1 percent. Russia’s Micex Index slid 0.3 percent, reversing a gain as Brent crude resumed its decline to the lowest prices since 2004.

The Ibovespa declined for a sixth day as gains in Brazil’s currency sapped the outlook for companies that depend on exports. Vale SA, the world’s largest iron-ore producer, fell 3 percent to the lowest since August 2004. The real strengthened 0.3 percent against the dollar.

Currencies

The Hang Seng China Enterprise Index of mainland shares in Hong Kong climbed 0.7 percent. The Shanghai Composite Index fell 2.4 percent, closing below 3,000 for the first time since August. Mainland stocks failed to join in a global rebound amid concern large corporate shareholders may take advantage of rallies to sell equities, according to JK Life Insurance Co.

The emerging-market currency index increased 0.3 percent, paring its loss this year to 2.3 percent. The rand rose more than 0.7 percent.

The yuan strengthened 0.2 percent against the dollar in offshore trading. The Chinese currency posted the biggest five-day gain on record in Hong Kong as the People’s Bank of China intensified efforts to curb outflows. The monetary authority kept its reference rate little changed at 6.5630.

The yield spread between emerging-market dollar debt over U.S. Treasuries widened six basis points to 454, according to JPMorgan Chase & Co. indexes. The measure rose to the highest since October 2011 on Tuesday.

China’s 10-year debt rose for a fifth day, pushing the yield down four basis points to 2.72 percent, the lowest since the notes were sold in October.

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