- Brent crude sells for the highest price since November
- Chinese shares in Hong Kong gain on Xi Jinping comments
Emerging-market stocks advanced for a second day as oil selling for the highest price since November helped lift energy producers and suppliers of Apple Inc. rallied after Berkshire Hathaway Inc. disclosed that it held a stake in the maker of iPhones.
Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. were among the biggest contributors to gains in the MSCI Emerging Markets Index, which gained 0.5 percent to 801.64. Chinese shares traded in Hong Kong rose the most in four weeks as President Xi Jinping pledged to cut excess capacity at state-owned enterprises. Russia’s ruble rose to the strongest level this month.
Brent crude jumped 0.6 percent to $49.28 a barrel on speculation that U.S. crude stockpiles declined last week while supply losses in Canada and Nigeria reduced the global glut. Oil’s 32 percent rally this year has fueled the appetite for riskier assets, sending stocks of exporting nations such as Russia and Brazil higher by about 20 percent each.
“The market is now following commodity prices rather than preempting them,” said Simon Quijano-Evans, chief emerging-market strategist at Commerzbank AG in London, who favors Russian, Colombian, Romanian and Indonesian local bonds. “Any knee-jerk reaction in oil prices is accompanied by a corresponding reaction in asset prices.”
U.S. stocks slipped and the Treasury yield curve flattened to the narrowest since 2007 after data on inflation and housing fueled speculation that the U.S. economy may be strong enough for the Federal Reserve to raise interest rates as soon as June.
Berkshire’s announcement that it had a $1.1 billion stake in Apple at the end of the first quarter helped erase a second monthly loss in the company’s shares. The holdings hint at billionaire Warren Buffett’s confidence in Apple’s ability to create new products that reignite revenue growth. Companies in developing markets with supplier ties to Apple gained, with Taiwan Semiconductor adding 1.7 percent and Samsung Electronics advancing 1.3 percent.
A gauge of developing-nation technology stocks rallied 1.2 percent, the most among 10 industry groups. Energy companies jumped 0.8 percent.
Gazprom PJSC dropped 2.3 percent in Moscow, dragging Russia’s Micex Index lower, after the newspaper Vedomosti reported that the energy exporter will pay lower dividends, based on 50 percent of profit to Russian accounting standards, rather than international standards. Economy Minister Alexey Ulyukayev confirmed the report, saying Russia’s government will order the state-controlled company to pay out 175 billion rubles ($2.7 billion) in 2015 dividends.
The Hang Seng China Enterprises Index of mainland shares listed in Hong Kong increased 1.4 percent, the most in a month, even as the Shanghai Composite Index fell 0.3 percent.
President Xi Jinping vowed to press ahead with plans to cut capacity at state-owned companies. Laurence D. Fink, head of BlackRock Inc., the world’s largest money manager, said “we all have to be worried” about China’s mounting debt amid slowing growth.
The MSCI Emerging Markets Currency Index added 0.2 percent. The gauge has declined 2 percent this month.
The South Korean won advanced 0.5 percent on speculation exporters took advantage of a drop over the previous two days to sell dollars. The currency was also supported by minutes of the Reserve Bank of Australia’s May meeting that showed policy makers considered leaving rates unchanged before opting for a cut, said Jeon Seung Ji, a foreign-exchange analyst at Samsung Futures Inc.
The Malaysian ringgit and The Taiwanese dollar strengthened 0.3 percent each. The ruble gained 0.2 percent.
The Brazilian real rose 0.2 percent after Itau Unibanco Holding SA’s chief economist Ilan Goldfajn was nominated on Tuesday to head up Brazil’s central bank, as Acting President Michel Temer works quickly to put in place an economic team to renew investor confidence and revive growth.
Russian local 2027 notes fell for the first time in five days, pushing the yield up three basis points to 8.81 percent. The government has asked parliament to amend this year’s budget plan to substitute a planned $3 billion Eurobond issue with local-currency borrowing, Tass news agency reports, citing Deputy Finance Minister Alexei Lavrov.
The premium investors demand to own emerging-market sovereign debt rather than U.S. Treasuries decreased two basis points to 391, according to JPMorgan Chase & Co. indexes.