Emerging-Market Stocks Rise to Four-Month High on China

Emerging-market stocks rose to a four-month high on speculation China will take further steps to bolster growth. South Africa’s rand erased its 2014 decline.

The MSCI Emerging Markets Index added 0.7 percent to 1,011.49, increasing for a third day. The Shanghai Composite Index climbed to a six-week high as China Petroleum & Chemical Corp., Asia’s largest refiner, jumped 2 percent. Brazil’s Ibovespa reversed an earlier advance as state-controlled oil company Petroleo Brasileiro SA sank. The rand paced gains among 20 out of 24 developing-nation currencies tracked by Bloomberg.

All 10 industries in the gauge for emerging-market stocks rose, led by consumer and financial shares. The Chinese government outlined a package of measures to support the expansion last week after easing funding restrictions for financial companies earlier this year. Premier Li Keqiang is under pressure to address weakening economic growth amid concern the nation will miss its 7.5 percent target for this year.

“Investors expect measures approved by the Chinese authorities and aimed at sustaining growth will work,” Alexander Morozov, chief economist for Russia at HSBC Holdings Plc, said in a telephone interview from Moscow. “That should support commodities prices and help emerging market sentiment.”

The iShares MSCI Emerging Markets Index ETF advanced 1.2 percent to $41.96. The premium investors demand to own emerging-market debt over U.S. Treasuries fell 0.01 percentage point to 294 basis points, according to JPMorgan Chase & Co.

Brazil, Russia

Brazil’s Ibovespa dropped from the highest level since November as Petrobras sank 2.9 percent. The real rose to a five-month high on bets the central bank will control inflation by allowing the currency to advance as policy makers phase out increases in borrowing costs before the presidential vote.

Russia’s Micex Index rose 0.2 percent, rebounding from a drop of as much as 1.1 percent earlier. Deputy Prime Minister Igor Shuvalov said the nation’s companies should consider delisting from foreign stock exchanges and trade in Moscow to boost security amid the standoff over Ukraine.

Turkey is selling nine-year euro-denominated bonds today, the first offering in the single currency this year, as the country seeks to cover its 2014 financing needs after borrowing costs dropped to a record.

China’s equity benchmark climbed 1.9 percent as trading resumed after a holiday. China Petroleum gained the most in two weeks. Shanghai Chaori Solar Energy Science & Technology Co., the first Chinese company to default on corporate bonds onshore, fell by the maximum limit of 5 percent as a trading halt was lifted. Tencent Holdings Ltd., Asia’s biggest Internet company, rebounded in Hong Kong after buying back shares.

The rand climbed after foreign investors bought South African bonds for a third day yesterday, the longest stretch in two weeks. Thailand’s baht jumped as data showed overseas investors increased holdings of local debt.

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