Emerging Stocks Rise to Two-Week High on Stimulus Bets
Emerging-market stocks rose, sending the benchmark index to a two-week high, as signs of weak economic growth from China to the U.S. spurred speculation that policy makers will take more steps to counter the slowdown.
The MSCI Emerging Markets Index (MXEF) advanced 0.1 percent to 969.97 at 5:01 p.m. in New York, climbing for a third day. Brazilian steelmaker Cia. Siderurgica Nacional SA posted its biggest three-day gain since January 2009 and AU Optronics Corp. (2409) surged 7 percent, the most in three years, after a report that Taiwan will ease curbs on Chinese investments. Zoomlion Heavy Industry Science & Technology Co. (1157), a Chinese construction- equipment maker, rose to a three-week high.
Chinese President Hu Jintao urged governments in Asia to speed up infrastructure development in a Sept. 8 speech, while South Korea announced $5.2 billion of economic support measures today. Reports showed China’s imports fell in August while industrial output rose the least in three years. The Federal Reserve meets this week to discuss potential asset purchases after the U.S. added fewer-than-estimated jobs last month.
“The fiscal stimulus in China is meaningful and could help turn things around,” Greg Lesko, who helps manage over $700 million at Deltec Asset Management in New York, said in a phone interview. “Over the short-term, I’d like to see the data improve some, which is what we really need to see a sustained rally.”
China’s industrial production increased 8.9 percent in August from a year earlier, the least since May 2009, the statistics bureau said Sept. 9. Chinese inbound shipments slid 2.6 percent in August from a year earlier, trailing a median estimate for a 3.5 percent gain among 35 analysts surveyed by Bloomberg.
Investors pulled $1.8 billion from emerging-market stock funds in the week ended Sept. 5, the most since May, according to data compiled by Cambridge, Massachusetts-based research firm EPFR Global.
Brazil’s Bovespa (IBOV) index added 0.1 percent, the Shanghai Composite Index (SHCOMP) advanced 0.3 percent and Taiwan’s Taiex Index increased 0.8 percent. Thailand’s SET Index (SET) climbed 0.4 percent to the highest level since July 1996.
Poland’s WIG20 gained 0.8 percent while Russia’s Micex (INDEXCF) Index added 0.3 percent. OAO Novatek, Russia’s second-biggest gas producer, sank the most since July after OAO Gazprom (OGZPY), the world’s biggest natural gas exporter, suspended fuel purchases.
The MSCI gauge has rallied 3.2 percent from a six-week low on Sept. 5 after China unveiled new spending plans for roads and subways and the European Central Bank announced a bond-buying program to support growth in the European Union, which purchases about 30 percent of exports from nations in the MSCI gauge.
The extra yield investors demand to own emerging-market bonds over U.S. Treasuries was unchanged at 301, according to JPMorgan Chase & Co.’s EMBI Global Index.
CSN, as Cia. Siderurgica is known, added 6.1 percent and Brazilian iron-ore producer Vale SA (VALE3) gained 3 percent as metals advanced. Airline Gol Linhas Aereas Inteligentes SA jumped 5.5 percent after Veja magazine said that Qatar Airways Ltd. is in talks to buy the carrier.
Zoomlion, China’s second-biggest maker of construction equipment, jumped 6.1 percent in Hong Kong, extending its three- day rally to 18 percent.
Infrastructure development is key to promoting recovery and achieving sustained and stable growth amid increasing downward risks to the global economy, Hu said to business executives at an Asia-Pacific Economic Cooperation forum in Vladivostok on Sept. 8. China’s Commerce Minister Chen Deming said measures to support and stabilize trade will be announced soon, China Central Television reported yesterday.
Korea Gas Falls
South Korea’s won strengthened 0.1 percent against the dollar after the government unveiled its economic support measures. The plan includes extra spending and tax cuts intended to boost the housing market and car sales, the Finance Ministry said today.
AU Optronics, Taiwan’s second-largest maker of liquid- crystal displays, jumped for a second day. Restrictions on Chinese investments in industries including LCD panels will be relaxed, the Taipei-based Economic Daily reported.
Sasol Ltd. (SOL), the world’s largest producer of motor fuel from coal, gained 2.6 percent in Johannesburg after saying fiscal full-year profit rose 19 percent from a year earlier.
Korea Gas Corp. (036460), the world’s biggest liquefied natural gas importer, tumbled 6.8 percent after saying it’s exploring various financial options, including the sale of new shares, to raise funds for investment. The retreat was the second-biggest in the MSCI index.
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