Emerging Stocks Increase Second Day as Technology Shares Rally
Emerging-market stocks gained for the second day, led by information technology companies.
Wintek Corp. (2384), Taiwan-based maker of equipment including liquid-crystal displays, surged 5.3 percent, while AU Optronics Corp. (2409) added 4.8 percent. OAO Inter RAO UES jumped as much as 3 percent in Moscow after Vedomosti reported Russian President Vladimir Putin ordered the government to speed up Rosneftegaz’s acquisition of 40 percent of OAO Irkutskenergo, which belongs to Russia’s third-largest power producer.
The MSCI Emerging Markets Index (MXEF) rose 0.1 percent to 1,045.06 by 5:45 p.m. in Istanbul, with 144 shares advancing, 39 retreating and 638 unchanged, while markets from Brazil to Romania were closed for the Christmas holiday. Democrats and Republicans discussed how to avoid more than $600 billion in tax gains and spending cuts, known as the fiscal cliff, which are scheduled to take effect Jan. 1.
“Emerging-market investors have a sense that U.S. lawmakers will finally come to a consensus soon, boosting appetite for riskier assets,” Alexander Ivanischev, head of research at Infina Investment Co., said by phone from Moscow.
Failure to reach an agreement would push the U.S. into recession for the first half of 2013, the Congressional Budget Office said. The 21 nations represented in the MSCI Emerging Markets Index send about 17 percent of their exports to the U.S. on average, World Trade Organization data show.
The developing-nations measure has risen 14 percent this year, compared with a 13 percent increase in the MSCI World Index. (MXWO) The emerging-markets index trades at 12.3 times estimated earnings, compared with the MSCI World’s multiple of 12.6, according to data compiled by Bloomberg.
Russia’s Micex Index (INDEXCF) added 0.1 percent, rising for the first day in three. The benchmark index in Turkey added 0.4 percent to a record high in a second day of gains.
Inter RAO gained 2.1 percent to 2.52 kopeks. Vedomosti cited unidentified people close to the deal, while in a report today VTB Capital analysts led by Mikhail Rasstrigin said Inter RAO’s sale of its Irkutskenergo stake is a “long-awaited step forward” for the utility.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries narrowed one basis point, or 0.01 percentage point, to 266 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.
Taiwan’s Taiex Index (TWSE) surged 1.3 percent, with trading volumes 15 percent below the 10-day average at the close, while China’s Shanghai Composite Index (SHCOMP) gained 2.5 percent amid expectations for a recovery in the world’s second-largest economy.
China is due to release figures this week on November profit for industrial companies, following a more than 20 percent surge in their earnings in October.
A gauge of emerging-market technology companies rose 0.5 percent, the best performance of 10 industry groups.
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