Emerging Stocks Advance as Ukraine’s UX Leads World Gains
Emerging-market stocks rose, following the biggest slide in a month, as concern eased that Ukraine’s crisis would escalate after Russian President Vladimir Putin ordered the end of military exercises in the country.
The MSCI Emerging Markets Index (UX) added 0.6 percent to 956.19 after yesterday’s 1.6 percent slump. Ukraine’s UX Index jumped 9.5 percent, leading gains among 94 global equity gauges tracked by Bloomberg. Russia’s Micex Index (INDEXCF) climbed the most in four years and the ruble rebounded from a record low, while stock benchmarks in Hungary, Turkey and Poland rallied at least 2.2 percent. China’s money-market rate rose the most in six weeks as the central bank withdrew excess cash from the financial system.
Stocks in developing nations spurred a global equity rally after President Putin said today he’d only send soldiers to Ukraine in an extreme case. The country isn’t considering absorbing the Black Sea region of Crimea, which Ukraine claims Russian forces have seized in recent days, Putin said. The decision signals that the crisis, the worst between Russia and the West since the Cold War ended, won’t immediately escalate.
“The big question was how far would Russia advance within Ukraine,” Paul Zemsky, the head of multi-asset strategies at ING U.S. Investment Management, which oversees $200 billion, said by phone from New York. “That was the fear. For now, it feels OK, but Ukraine could still be a very serious issue.”
The iShares MSCI Emerging Markets Index exchange-traded fund rose 1.7 percent to $39.44. Nineteen out of 24 developing-nation currencies rose, led by Russia’s ruble. The premium investors demand to own emerging-market debt over U.S. Treasuries sank 0.15 percentage point to 317 basis points, according to JPMorgan Chase & Co.
Ukraine’s Eurobonds rebounded from a record and the currency rallied, while the UX Index of equities recovered from a 12 percent drop yesterday. Russia’s ruble climbed 1.3 percent from a record versus the dollar, while the benchmark Micex jumped 5.3 percent, the most since May 2010.
China’s stocks fell, halting the benchmark index’s longest stretch of gains in three weeks, before the start of an annual policy-setting meeting tomorrow. China Citic Bank Corp. slumped 2 percent. The seven-day repurchase rate, a gauge of funding availability, increased 75 basis points, or 0.75 percentage point, to 3.53 percent. That’s the biggest gain since Jan. 20.
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