Emerging Stocks Rise Most in Two Weeks on Stimulus Bets
Emerging-market stocks advanced, with the benchmark index posting the biggest gain in almost two weeks, as economic data from China to Poland fueled speculation central banks will take more steps to boost growth.
The MSCI Emerging Markets Index rose 0.6 percent to 952.83 at 4:34 p.m. in New York, advancing the most since Aug. 21. Zijin Mining Group Co. (2899), China’s largest gold producer by market value, and OAO Severstal (CHMF), Russia’s second-biggest steel company, increased for the first time in seven days as stimulus speculation lifted metals. Brazil’s Bovespa Index rose 0.4 percent, snapping three days of losses.
Chinese manufacturing shrank for the first time in nine months in August, while South Korea reported the slowest inflation in 12 years. Poland’s central bank has scope to cut interest rates, Governor Marek Belka said in a Bloomberg Television interview. U.S. Federal Reserve Chairman Ben Bernanke signaled on Aug. 31 another round of bond purchases to support the world’s largest economy is possible.
“More stimulus measures by the U.S., China and other countries will bolster investors’ sentiment in the equity markets,” saidVattana Vongseenin, chief executive officer of Bangkok-based Phillip Asset Management Co., which oversees about $20 million. “Still, the long-term global growth outlook remains very gloomy.”
‘Room to Reduce’
The Shanghai Composite Index (SHCOMP) rose 0.6 percent, after closing last week at the lowest level since February 2009. Russia’s Micex Index increased 1.2 percent, the biggest gain since Aug. 21. Poland’s WIG20 (WIG20) advanced 0.3 percent, led by a 2.7 percent gain for PKN Orlen SA.
The MSCI emerging-market index has climbed 4 percent this year, after sliding 0.5 percent last month. That compares with a 2012 gain of 8.3 percent for the MSCI World Index of developed- nation equities. U.S. markets were closed for the Labor Day holiday.
The Icelandic krona led declines among emerging-market currencies, weakening 0.5 percent against the euro. The Polish zloty also fell 0.5 percent.
“There is a room to reduce which, if necessary, I’m sure we’ll utilize,” Belka told Bloomberg Television during a weekend conference of central bankers and economists in Jackson Hole, Wyoming. “We feel the economy is slowing,” Belka said, while adding that fluctuations in the currency are not a concern and its current value is “good for exports.”
Poland’s purchasing managers’ index, a gauge of manufacturing, fell to 48.3 in August from 49.7 in July, HSBC Holdings Plc and Markit Economics said today. The median estimate of 12 economists in a Bloomberg survey was 49.2. A reading below 50 shows a contraction.
China’s Purchasing Managers Index dropped to 49.2 in August from 50.1 in July, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. A separate report released today by HSBC Holdings Plc and Markit Economics showed China’s manufacturing contracted last month at the fastest pace since March 2009.
Zijin Mining jumped 3.7 percent in Hong Kong and Severstal added 2.8 percent in Moscow. Copper for three-month delivery rose 0.8 percent in London.
A measure of technology companies in the MSCI Emerging Markets Index added 0.9 percent, the most among 10 industry groups. Hon Hai Precision Industry Co. (2317), the world’s largest contract manufacturer of electronics, surged 6.1 percent to a four-month high in Taipei after it reversed loss provisions for a planned investment in Sharp Corp.
Samsung Card Co. (029780) jumped 15 percent, the top advance in the MSCI gauge. The credit-card company will buy back 7.1 million shares through Nov. 30 and cancel them when the buyback is complete, it said in a regulatory filing on Aug. 31.
Samsung Electronics Co., the world’s largest mobile-phone maker, fell 1.2 percent in Seoul as Apple Inc. sought a ban on U.S. sales of new Galaxy smartphones, deepening their global patent disputes.
The Markit iTraxx SovX CEEMEA Index of east European, Middle Eastern and African credit-default swaps slipped one basis point, or 0.01 percentage point, to 241. The extra yield investors demand to own emerging-market bonds over U.S. Treasuries rose one basis point to 318, according to JPMorgan Chase & Co.’s EMBI Global Index.
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