Emerging Stocks Rise Led by Oil Producers as Europe Grows
Emerging-market stocks advanced for a fifth day, led by energy producers, as the euro area exited its longest-ever recession. Forward contracts in the rupee increased after India restricted foreign-exchange outflows.
The MSCI Emerging Markets Index added 0.2 percent to 967.92. OAO Gazprom and OAO Novatek, Russia’s biggest natural-gas producers, jumped more than 1.7 percent. Brazil’s Ibovespa gained for a sixth session, its longest winning streak in 11 months. Egypt’s EGX 30 Index tumbled the most in the world as police stormed the camps where supporters of ousted President Mohamed Mursi were gathered. India’s rupee approached a record low before the government’s announcement.
Stocks gained after data showed that gross domestic product in the 17-nation euro area rose 0.3 percent in the April-June period, following a contraction in the previous three months. Federal Reserve Chairman Ben S. Bernanke next month will probably reduce the central bank’s bond purchases, according to 65 percent of economists surveyed by Bloomberg.
“Europe exiting a recession would be good,” Michelle Gibley, director of international research at San Francisco-based Charles Schwab Corp., said by phone. Her firm manages $2.12 trillion in client assets. It helps emerging markets to the extent that they are “export-oriented,” she said. “A near-term rally is in the cards.”
Seven out of 10 groups in the MSCI Emerging Markets Index rose today as commodity companies gained more than 0.4 percent. The broad measure dropped 8.3 percent this year, compared with a 14 percent surge in the MSCI World Index. The gauge of developing nations is trading at 10.2 times estimated earnings, below the valuation of developed markets of 13.9.
The iShares MSCI Emerging Markets Index exchange-traded fund added 0.3 percent to $40.10. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, advanced 2.3 percent to 21.92.
Brazil’s Ibovespa gained 0.6 percent.
The Micex Index (INDEXCF) rallied 1.1 percent as Gazprom, Russia’s natural-gas export monopoly, jumped to the highest level since March 27. Novatek climbed to a one-month high. Poland’s WIG20 index gained 0.8 percent, while stocks in Turkey and the Czech Republic were little changed.
Indian (SENSEX) stocks advanced for a fourth day as Tata Steel Ltd. (TATA)’s profit surged. The government announced restrictions on foreign-currency outflows by local companies and individuals after measures to contain a record current-account deficit and attract overseas investors failed to steady the rupee. Rupee forwards rose for the first time in three days.
The Shanghai Composite Index (SHCOMP) retreated for the first time in four days. Zijin Mining Group Co. slid 1.6 percent after posting its lowest first-half profit since 2006. Huaneng Power International Inc. and China Yangtze Power Co. paced declines by electricity suppliers.
Egypt’s benchmark EGX 30 Index retreated 1.7 percent, the biggest drop among 94 benchmarks tracked by Bloomberg. Orascom Telecom Holding fell the most in three weeks. The bourse and banks will shut tomorrow, the nation’s exchange said.
The premium investors demand to own emerging-market debt over U.S. Treasuries rose 0.01 percentage point to 321 basis points, according to JPMorgan Chase & Co.
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