Emerging Stocks Rise to One-Week High on Fed Easing Speculation
Emerging-market stocks rose to a one-week high on speculation Federal Reserve Chairman Ben S. Bernanke will indicate further easing and after China’s commerce ministry said the nation’s economy will gain momentum.
The MSCI Emerging Markets Index (MXEF) added 0.8 percent to 933.78 as of 12:49 p.m. in London, set for its highest close since July 10 and gaining for a third day. The Hang Seng China Enterprises Index jumped 1.8 percent in Hong Kong, its steepest gain since June 29. China Railway Group Ltd. (390), the country’s biggest rail builder by market value, gained 5.9 percent after the railways ministry said it will increase investment.
Chinese growth is likely to pick up in the second half and the government is “confident” it will achieve a 10 percent target for increasing trade in 2012, Shen Danyang, a spokesman for the Commerce Ministry, said at a briefing. Bernanke will deliver his semi-annual report on the economy and monetary policy before Congress today, after a report yesterday showing a contraction in June retail sales kindled speculation the Fed will introduce more measures to support the world’s largest economy.
“Bets on more stimulus measures and policy cooperation by key global economies are supporting markets,” Chu Moon Sung, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $28 billion, said by phone today. “Much of the woes over Europe’s debt crisis and the slowing global economy appear to be priced in.”
The Micex Index (INDEXCF) rallied 1.1 percent in Moscow to head for the highest level since July 4, led by a 1.8 percent gain in OAO Gazprom, the world’s largest natural gas producer.
The FTSE/JSE Africa All Share Index (JALSH) advanced 0.2 percent in Johannesburg. Petmin Ltd. (PET), South Africa’s largest anthracite coal miner, jumped 1.4 percent after it said it was granted a 20 year mining license for an expansion. The ISE National 100 Index (XU100) fell 0.1 percent in Turkey.
The Shanghai Composite Index (SHCOMP) rose 0.6 percent from its lowest close since March 2009. Dubai’s benchmark stock index climbed 0.9 percent to the highest level in more than two months.
The BSE India Sensitive Index, or Sensex, gained less than 0.1 percent, snapping four days of retreats. The rupee rallied 0.7 percent against the dollar. Overseas funds bought Indian shares for a 10th straight day on July 13, data from the market regulator showed yesterday, the longest run of net purchases since March.
The Mexican peso strengthened 0.8 percent and the ruble 0.6 percent.
China Railway had its biggest gain since April 3 in Hong Kong. The government will boost this year’s railway infrastructure investment plan by 9 percent to 448.3 billion yuan ($70.3 billion), according to a July 6 statement posted on the website of a provincial office of the National Development and Reform Commission that cited the Ministry of Railways.
Dongyue Group (189), a maker of fluorochemicals, advanced 10 percent in Hong Kong after Barclays Plc rated the shares new overweight.
Also in Hong Kong, China Shanshui Cement Group Ltd. (691) tumbled 10 percent after Deutsche Bank AG cut its share-price estimate by 23 percent.
The Markit iTraxx SovX CEEMEA Index of eastern European, Middle East and Africa credit-default swaps fell 13 basis points, or 0.13 percentage point, to 253, according to data compiled by Bloomberg.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries slipped eight basis points to 346, according to JPMorgan Chase & Co.’s EMBI Global Index.
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