Emerging Stocks Head for Biggest Three-Day Gain in Nine Months
Emerging-market stocks rose, sending the benchmark index to its biggest three-day rally in nine months, as South Korea raised its economic growth forecast and India’s current-account deficit narrowed.
Samsung Electronics Co. (005930) and Hyundai Motor Co. (005380) drove South Korea’s benchmark gauge to the steepest advance since September. India’s S&P BSE Sensex advanced the most in almost two weeks and the rupee rebounded from a record low. The won and the Malaysian ringgit rallied as investors speculated the Federal Reserve will hold back from reducing monetary stimulus.
The MSCI Emerging Markets Index rose 1.3 percent to 913.94 as of 2:08 p.m. in Hong Kong, extending a two-day, 2.1 percent gain. South Korea’s finance ministry increased its 2013 growth forecast to 2.7 percent from 2.3 percent, a report showed today. India’s current-account deficit narrowed more than estimated last quarter from a record, official data showed. The U.S. revised lower its reading for first-quarter economic growth, according to figures from the Commerce Department.
“Equities are stabilizing after the sharp fall; regional currencies are recovering on expectations the U.S. quantitative easing will continue as long as their economic data remain weak,” David Pezarkar, head of equities at Daiwa Asset Management (India) Pvt. said in Mumbai. “Numbers from Korea and India also seem to soothe sentiments.”
The emerging-markets measure has declined 9.3 percent this month, headed for the steepest monthly loss since May 2012. It has fallen 13 percent this year, headed for the worst first-half rout since 1998 as the Fed said it may pare asset purchases that have fueled gains and investors speculated that rising Chinese funding costs will curb growth in Asia’s largest economy.
All 10 industry groups in the MSCI Emerging Markets Index rose today, led by technology and consumer-discretionary companies, which gained at least 2.2 percent.
Samsung Electronics jumped 6.2 percent in Seoul, the most since December 2011. Today’s gain snapped six days of losses that dragged the stock’s 14-day relative strength index to 21 yesterday, below the 30 level that signals a buy to some investors. It has fallen 15 percent from a peak in January.
Hyundai Motor gained 4.8 percent in Seoul, the most in two months. South Korea’s Kospi index surged 2.9 percent, its second day of gains.
India’s Sensex climbed 1 percent as the rupee strengthened 0.3 percent. The nation’s current-account deficit was $18.1 billion in January through March, compared with a revised $31.9 billion in the previous quarter, the Reserve Bank of India said today. The median of 14 estimates in a Bloomberg News survey was for a $21 billion gap. The deficit last quarter was 3.6 percent of gross domestic product, from an unprecedented 6.7 percent of GDP in October to December.
The won gained for a third day after South Korea’s current-account surplus widened to a record. The ringgit strengthened 0.5 percent.
The Philippine Stock Exchange Index rallied 3 percent, poised for the biggest two-day gain since November 2008, as a decline in valuations lured the largest inflow of foreign funds in a month. Overseas investors bought a net $27.9 million worth of Philippine shares yesterday, ending five days of outflows and the most inflow since May 31, data compiled by Bloomberg show.
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong added 0.1 percent, its second day of gains. The Shanghai Composite Index rose 0.1 percent, snapping a six-day loss.
Vietnam’s VN index rose 1.1 percent as the nation’s economic growth accelerated in the second quarter after the central bank cut interest rates to revive lending to businesses and rising foreign investment boosted the nation’s exports.
The Jakarta Composite Index climbed 2.7 percent, its highest level in a week. Taiwan’s Taiex Index rose 1.3 percent. Trading volumes for the Sensex were 42 percent higher, data compiled by Bloomberg show.
The emerging-markets measure has dropped 13 percent this year, compared with a 6.8 percent gain in the MSCI World Index. The developing-nation gauge trades at 9.5 times projected 12-month earnings, compared with the MSCI World’s 13 times, data compiled by Bloomberg show.
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