- Ibovespa rises most in world as impeach push regains momentum
- Mexican peso strengthens as oil prices rise from two-week low
Emerging-market stocks rose for the first time in eight days as Brazil’s benchmark surged the most in the world on renewed speculation that the country’s president will be ousted and shares in the Philippines climbed as its new leader sought to calm investors after winning the vote.
The MSCI Emerging Markets Index rose 0.8 percent to 806.91. The gauge fell 5.1 percent in the previous seven sessions. Currencies were mixed as Brent crude resumed its advance, rising from a two-week low. Mexico’s peso gained 1.3 percent, the most since March 17, while Malaysia’s ringgit slid 0.9 percent.
In stocks, there is “a small technical rebound from the weak preceding days,” said Maarten-Jan Bakkum, a senior strategist at NN Investment Partners in The Hague. “Currencies are struggling mainly due to Chinese growth concerns” said Bakkum, who favors shares from India and the Philippines.
Developing-nation assets have retreated in May after rallying in the last four months as data pointed to sluggish growth in the world’s biggest economies. U.S. exchange-traded funds that invest in emerging markets saw a net $632.1 million of capital outflows on May 9, according to data compiled by Bloomberg. The Bloomberg Dollar Spot Index fell 0.2 percent, ending a five-day winning streak that was triggered by remarks from several Federal Reserve officials that U.S. borrowing costs may rise as soon as June.
The Ibovespa surged 4.1 percent, resuming a rally that has put Brazilian assets among this year’s world beaters as the drive to oust President Dilma Rousseff appeared to get back on track. The nation’s assets slumped Monday after the head of the lower house, Waldir Maranhao, called for an annulment of last month’s impeachment vote. He reversed that decision in an overnight statement.
The Philippine Stock Exchange Index surged 2.6 percent, the most since Jan. 27, as Duterte, a tough-talking mayor of Davao city, said on Monday it was time to start a process of “healing,” and named potential cabinet members.
The Hang Seng China Enterprises Index climbed 0.4 percent, erasing earlier losses. The Shanghai Composite Index closed little changed after data showed China’s consumer prices rose for a third month, while factory-gate deflation narrowed more than expected.
The MSCI Emerging Markets Index has gained 1.6 percent this year and is valued at 11.3 times the 12-month estimated earnings of its members. That compares with a multiple of 15.9 for the MSCI World Index, which is little changed in 2016.
The MSCI Emerging Markets Currency Index was little changed after falling 1.9 percent in the past seven days.
Brazil’s real strengthened 1.3 percent. The Philippine peso rose 0.7 percent. South Africa’s rand gained 0.4 percent. The offshore yuan strengthened 0.1 percent. HSBC Holdings Plc strategists today said the currency is about 8 percent overvalued based on BIS effective exchange-rate terms.
South Korea’s won touched its lowest level in seven weeks. The ringgit fell to the lowest since March 21.
The yield on Turkish 10-year bonds rose 13 basis points to 9.84 percent. The yield on two-year notes rose 14 basis points to 9.75 percent. South African bonds declined, pushing the yield on 10-year debt up two basis points to 9.17 percent.
The premium investors demand to own emerging-market debt over U.S. Treasuries narrowed one basis point to 401, according to JPMorgan Chase & Co. indexes.