Emerging Stocks Advance as Rupee Gains Most in 27 Years
Emerging-market stocks rose as oil slumped on easing prospects for an imminent military attack on Syria. Indonesia’s rupiah gained after a surprise interest-rate increase, while India’s rupee jumped the most since 1986.
The MSCI Emerging Markets Index advanced 1.2 percent to 920.84, capping the biggest increase in more than a month. Philippine stocks climbed from an eight-month low as economic growth exceeded estimates. The rupiah rebounded from a four-year low after Bank Indonesia raised its benchmark interest rate in an unscheduled move, while India’s rupee strengthened 3.4 percent. Mexico’s IPC index declined for a seventh consecutive day in the longest slide since January 2009.
Crude oil, which had jumped 4 percent in two days, slid as the U.K. and France said they favor waiting for the results of a United Nations investigation into Syria’s alleged use of chemical weapons. The U.S. economy grew at a faster pace and jobless claims fell, dimming prospects for Federal Reserve bond purchases. The benchmark measure for developing nations has plunged 12 percent since May 22, when the Fed signaled stimulus could be trimmed if the economy showed sustained recovery.
“Risk in the emerging markets is trying to find a floor, and they finally caught a bid,” Sean Lynch, the Omaha, Nebraska-based global investment strategist for Wells Fargo Private Bank, said in a telephone interview. His firm oversees about $170 billion. “You have some comments and actual policy maneuvers overnight and that maybe injected a little confidence into these markets.”
All 10 groups in the MSCI Emerging Markets Index rose today, led by technology shares. The gauge of developing nations trimmed this year’s plunge to 13 percent, compared with an 11 percent advance for a measure of developed markets.
The iShares MSCI Emerging Markets Index exchange-traded fund rose 0.8 percent to $37.73. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, retreated 0.7 percent to 28.01.
“This is a relief rally,” Benoit Anne, head of emerging-markets strategy at Societe Generale SA in London, said by e-mail. “Oil prices are lower, which is an indicator of geopolitical tensions going down.”
Most Brazilian stocks rose as Cia. Hering led consumer companies higher after a report eased concern that inflation will hurt Brazil’s recovery, outweighing losses by OGX Petroleo e Gas Participacoes SA. The oil producer tumbled 12 percent, extending a three-day plunge to 38 percent.
The Mexican IPC index fell 0.2 percent, led by Minera Frisco SAB, billionaire Carlos Slim’s gold and silver mining company. The gauge extended this year’s drop to 10 percent.
The Micex Index added 0.2 percent in Moscow, after tumbling to the lowest level since Aug. 8 yesterday. OAO Rosneft climbed after Chief Executive Officer Igor Sechinraised his stake in the nation’s biggest oil producer.
The Borsa Istanbul National 100 Index gained as Otokar Otomotiv ve Savunma Sanayi AS, a Turkish producer of civilian and military vehicles, jumped the most in more than two months after it won a defense contract. The lira rebounded from a record low. Benchmark gauges in the Czech Republic and Poland advanced, while Hungarian shares retreated.
India’s S&P BSE Sensex (SENSEX) jumped as Reliance Industries Ltd., owner of the world’s largest refining complex, increased the most in three months. The rupee rose as the central bank said it will sell dollars to the state oil importers after the currency sank the most in two decades yesterday.
Indonesia joined Brazil, Turkey and India in taking steps to support their currencies this month as the prospect of reduced U.S. monetary stimulus prompts investors to sell emerging-market assets. The rupiah advanced 0.1 percent, after reaching a four-year low yesterday.
The Philippine Stock Exchange Index climbed 3.6 percent, the most since June 26 and ending a two-day slump that sent the measure yesterday to the lowest since Dec. 18. SM Investments Corp., owner of the nation’s top shopping mall operator, and International Container Terminal Services Inc., the country’s biggest port operator, jumped more than 4 percent.
China’s stocks fell for a second day, led by metal and energy companies, after the nation’s biggest copper producer reported slumping profits and commodity prices dropped. Jiangxi Copper Co. slid for the first time in five days, losing 3.5 percent as UOB-Kay Hian Holdings Ltd. advised selling the shares. PetroChina Co. declined after senior managers were removed amid a government probe into corruption.
The premium investors demand to own emerging-market debt over U.S. Treasuries gained one basis point, or 0.01 percentage point, to 358 basis points, according to JPMorgan Chase & Co.
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