Emerging Stocks Cap Best Week Since June as Forint JumpsJulia Leite, Zahra Hankir and Ian Sayson
Emerging-market stocks rose, capping the best week since June, as an increase U.S. consumer spending sparked confidence in the economy. The forint led gains in currencies after Standard & Poor’s raised Hungary’s outlook.
The MSCI Emerging Markets Index added 1 percent to 984.91, extending its rally for the week to 4.2 percent. Hungary’s BUX Index jumped 2.3 percent, led by refiner Mol Nyrt., while the forint posted the biggest advance among the 31 global major currencies tracked by Bloomberg. Turkey’s benchmark equity gauge erased this year’s decline on speculation municipal elections won’t destabilize financial markets. India’s S&P BSE Sensex rose to a record and the rupee climbed to an eight-month high.
Stocks joined a global rally after data showed that consumer spending in the U.S. rose in February by the most in three months as incomes increased. China has policies in reserve to deal with any economic volatility this year and can’t ignore “difficulties and risks” from a slowdown in the economy, Premier Li Keqiang said on the government’s website.
“We’ve seen steady growth in the U.S.,” Timothy Ghriskey, chief investment officer at New York-based Solaris Asset Management LLC, which helps manage about $1.5 billion in assets, said by phone. “It’s a good backdrop for earnings.” In addition, “any time there’s some indication that the Chinese economy may growth faster, investors become excited,” he said.
The iShares MSCI Emerging Markets Index exchange-traded fund advanced 0.8 percent to $40.74, rising for a seventh day. The premium investors demand to own emerging-market debt over U.S. Treasuries slipped 0.05 percentage point to 298 basis points, according to JPMorgan Chase & Co.
The forint rose to the strongest level in a month versus the euro after S&P raised the outlook for Hungary’s junk-rated sovereign debt on accelerating growth and an improving current-account balance. The BUX climbed for a fifth day. The Borsa Istanbul 100 index jumped 3.1 percent, led by banks. Russian stocks posted a weekly gain on speculation expanded U.S. sanctions over Crimea won’t hobble the economy.
India’s S&P BSE Sensex closed at a record for a fourth time this week. State Bank of India rallied to an eight-month high after the central bank extended the deadline for lenders to meet global capital norms by a year to March 2019.
China’s benchmark money-market rate dropped by the most in three weeks. The seven-day repurchase rate fixing snapped an 11-day gain, the longest rising streak since October 2007.
Brazil’s Ibovespa posted its biggest two-week advance in 19 months as an increase in commodity prices supported the outlook for Brazil’s exporters. Pulp company Fibria Celulose SA led gains among raw-materials producers.