Emerging Stocks Rise as Ruble Tumbles to Lowest Since ’09
Emerging-market advanced, trimming the biggest monthly slide since June, after better-than-estimated U.S. data bolstered optimism about global growth. Russia’s ruble tumbled to the lowest level in four years.
The MSCI Emerging Markets Index increased 0.3 percent to 1,008.81, paring its drop for the month to 2.5 percent. Mexico’s IPC Index posted the biggest gain among major developing-nation gauges, led by America Movil SAB. Brazil’s Ibovespa rose for the first time in three days as Itau Unibanco Holding SA (ITUB4) drove a rally in lenders. The ruble slid to the lowest since 2009 against the central bank’s target basket of dollars and euros.
Stocks gained after data showed U.S. jobless claims unexpectedly fell to a two-month low, while a gauge of consumer sentiment exceeded forecasts. Minutes of the Federal Open Market Committee meeting Oct. 29-30 released Nov. 20 showed officials expected to reduce their purchases “in coming months” as the economy improves. The gauge for stocks in emerging markets has retreated 4.4 percent this year, compared with a 21 percent rally for the MSCI World Index of developed nations.
“Those seemed to be really good numbers across the board, and that certainly helps sentiment,” Walter Todd, chief investment officer at Greenwood Capital Associates LLC in Greenwood, South Carolina, who helps manage $950 million, said by phone. “That dynamic presents a challenge to emerging markets. They’ll move higher, but probably continue to underperform developed markets.”
The iShares MSCI Emerging Markets Index exchange-traded fund rose 0.7 percent to $41.92. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, retreated 2.1 percent to 23.17.
Brazil’s Ibovespa gained as Itau rallied 2.7 percent after President Dilma Rousseff’s chief of staff voiced support for lenders in a $65 billion lawsuit. The real declined for a third day as speculation that the Federal Reserve will curtail U.S. monetary stimulus outweighed the Brazilian central bank’s efforts to bolster the currency.
Mexico’s IPC jumped to the highest since Sept. 18 as America Movil, the phone company controlled by billionaire Carlos Slim, climbed 3.3 percent.
Russian stocks slumped as crude oil, the nation’s chief export earner, slid to the lowest level in almost six months after industry data showed U.S. crude supplies increased. OAO Lukoil (LKOH) retreated 0.7 percent, pacing losses in energy companies. The ruble declined a third day, losing 0.4 percent to 38.3972 against the central bank’s target basket of dollars and euros by 6 p.m. in Moscow. That’s the lowest since August 2009.
Benchmark gauges in the Czech Republic and Hungary rose, while the Borsa Istanbul National 100 Index dropped for a second day. Teknosa Ic ve Dis Ticaret AS, a Turkish technology retailer, and carmaker Tofas Turk Otomobil Fabrikasi AS tumbled after a regulatory proposal sought to curb loans and spending.
The Shanghai Composite Index (SHCOMP) climbed for the first time in five days as brokerages led gains among financial companies, while rising tensions over a new air defense zone spurred an advance for defense-related companies. Sinolink Securities Co. (600109) and Sealand Securities Co. surged more than 7 percent. Guangzhou Hi-Target Navigation Tech Co. jumped 10 percent after two American B-52 bombers flew through disputed areas of the East China Sea covered by China’s defense zone.
Most Indian stocks fell before the expiration of derivatives contracts tomorrow. State Bank of India slid for the second day, pacing losses among lenders. Bharti Airtel Ltd. (BHARTI), India’s largest mobile-phone operator, decreased to a two-month low. Wockhardt Ltd. (WPL) tumbled the most in more than two months after the drugmaker was banned from selling some medicines in the U.S. Tata Motors Ltd. (TTMT) rose to a record.
Thai government bonds and stocks rose, while the baht fell, after the central bank unexpectedly cut its benchmark interest rate amid political unrest that is hurting the nation’s economy. The two-year yield dropped by the most since October 2012 after the Bank of Thailand reduced its policy rate by a quarter of a percentage point to 2.25 percent.
The premium investors demand to own emerging-market debt over U.S. Treasuries fell three basis points, or 0.03 percentage point, to 331 basis points, according to JPMorgan Chase & Co.
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