- Developing-nation benchmark surpasses 50-day moving average
- Energy shares lead MSCI Index higher on oil output talks
Developing-nation stocks rallied to a six-week high and Russia’s ruble led currencies higher as oil prices climbed, helping push shares in Dubai into a bull market.
A gauge of energy producers jumped the most among 10 industry groups, and Dubai’s DFM General Index grew 2.5 percent, highest in 11 months. Chinese stocks rose to a one-month high as the government named a new securities regulator. The Brazilian real advanced 1.9 percent against the dollar, the most in emerging markets after the ruble, as the Ibovespa equity benchmark closed at the highest level this year in Sao Paulo.
An agreement between Russia and Saudi Arabia last week to hold output helped improve sentiment toward commodity-producing countries by shoring up oil prices. Brent crude advanced on Monday as the government in Moscow said talks on a freeze will be completed by March 1. China, which is battling a slowdown in growth without triggering a credit blowout, named a new chairman to oversee the world’s second-largest stock market after last summer’s slump and announced a tax cut on home transactions.
“Some of the gains are related to the bounce in the oil price and also news from China over the weekend to stimulate the housing sector,” said Michael Wang, a strategist at hedge fund Amiya Capital in London. “Oil is helping sentiment because lower oil prices are causing people to worry we’re in a global recession. Any stability would be helpful in taming those fears.”
Wang prefers Indian, Indonesian and Mexican shares over stocks in Turkey, South Africa and Brazil.
The MSCI Emerging Markets Index added 1.1 percent to close at 749.42, above its 50-day moving average. All 10 industry groups in the the developing stocks index rose. The benchmark gauge has declined 5.6 percent this year, compared with a 6.3 percent drop for developed-nation equities.
Brent crude added 5.1 percent to $34.69 a barrel in London on the Russian output news and Nigeria said some countries should have production capped at higher levels. An index of shares in the oil-exporting Gulf Cooperation Council moved to a six-week high.
Reliance Industries Ltd., operator of the world’s biggest oil-refinery complex, climbed 1.9 percent in Mumbai and led India’s S&P BSE Sensex to a fourth day of gains. Equity gauges in Abu Dhabi and Dubai rose 2.5 percent, while Turkish shares gained 2.6 percent. Poland’s WIG20 added 1 percent to the highest since Dec. 30 as copper and silver producer KGHM Polska Miedz SA jumped 4 percent.
The Ibovespa rose 4.1 percent as commodity producers such as Vale SA and Petrobras SA added more than 11 percent.
The Shanghai Composite jumped 2.4 percent, halting a two-day loss. Developers gained after the government said it will cut taxes on home transactions.
Alibaba Health Information Technology Ltd. plunged 14 percent in Hong Kong, the biggest decliner in MSCI’s developing-nations measure, after China said it will halt the implementation of a drug-coding system that’s developed and operated by the company.
The ruble strengthened 2.2 percent and South Africa’s rand climbed 1.3 percent against the dollar. Indonesia’s rupiah rose 0.4 percent after a central bank official said the cut in lenders’ reserve requirements will add 165 trillion rupiah ($12.3 billion) of potential capital for economic development. Colombia’s peso gained 1.4 percent. The real rose 1.9 percent.
A measure of 20 emerging-market currencies rose 0.6 percent, extending last week’s 0.2 percent gain.
Government bonds from emerging Europe advanced, with yields on Russian five-year debt declining five basis points to 10.07 percent.
Argentina’s benchmark bonds due 2033 jumped 1.3 percent to 119.25 cents on the dollar, a record high, after a judge agreed Friday to drop orders that barred Argentina from paying restructured debt.
The yield on Taiwan’s five-year notes climbed three basis points, the most since October, to 0.55 percent after a sale of two-year government bonds fell short of target.
The extra yield investors demand to own emerging market debt over U.S. Treasuries fell four basis points to 468, according to JPMorgan Chase & Co. indexes.