Emerging Stocks Climb to 18-Month High as Russia, Saudi AdvanceNatasha Doff and Ian Sayson
Emerging-market stocks rose to an 18-month high as Chinese shares climbed on bets the government will do more to boost growth. Russian equities rebounded and Saudi Arabia gained on plans to open the market to foreign investors.
China Petroleum & Chemical Corp. rose the most since March in Hong Kong. Saudi stocks gained 2.8 percent to a six-year high. The Micex Index in Moscow ended its longest losing streak since January as rebels in Ukraine released bodies from the Malaysian jet crash. The Ibovespa climbed for a third day in Sao Paulo. Indonesian stocks fell as Joko Widodo was declared the winner of the presidential election while his opponent withdrew from the count.
The MSCI Emerging Markets Index added 1.1 percent to 1,074.79. Russia is happy that rebels handed over black boxes to Malaysian representatives, Russia’s Foreign Ministry said in a website statement. Saudi Arabia will allow foreign investors into its stock market in 2015, providing greater access to the Arab world’s biggest exchange.
“Saudi Arabia is rallying after it approved foreign investor access,” Michael Wang, an emerging-market strategist in London at Amiya Capital LLP, said by e-mail. “This is clearly a huge positive, but we’re waiting for further details on implementation.”
All 10 industry groups in the developing-nation measure rose, led by energy shares. China Petroleum & Chemical surged 3.6 percent after saying first-half oil and gas output increased 8 percent.
Rebels in eastern Ukraine began releasing the bodies of the 298 people killed in the shooting down of a Malaysia Airlines passenger jet last week as European foreign ministers meet to discuss sanctions against Russia today.
The Micex climbed 1.6 percent, snapping a six-day retreat, as a technical indicator signaled losses were overdone. The 14-day relative strength index for the bourse fell below 30 yesterday, signaling to some analysts the gauge was oversold. It rebounded to 37 today.
OAO Sberbank, the nation’s biggest lender, added 3 percent, while oil producer OAO Bashneft surged 9.3 percent after losing 21 percent in the previous four days. The ruble advanced 0.6 percent versus the dollar.
The Ibovespa advanced 0.6 percent. BR Malls Participacoes SA gained 7.5 percent, the best performance on the Brazilian benchmark, as real estate stocks rallied.
The Tadawul All Share Index jumped the most since September 2013. Saudi Arabia’s cabinet authorized overseas financial institutions to trade equities in the Tadawul and gave the Capital Market Authority scope to determine the timing, according to state-run Saudi Press Agency.
MSCI Inc. said Saudi could be included in its emerging-markets index by 2017 at the earliest.
The FTSE/JSE Africa All Shares Index jumped 1 percent, ending a three-day retreat. South Africa’s biggest employers group by number of workers agreed to offer a 10 percent pay increase to low-level earners over three years to end a strike that’s entering its fourth week.
The emerging-markets gauge has risen 7.2 percent this year and trades at 11.2 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has gained 5.4 percent and is valued at a multiple of 15.1.
The Shanghai Composite Index advanced 1 percent to the highest close in more than a month. The government granted a 1 trillion yuan ($161 billion) loan to China Development Bank to help fund subsidized housing, according to a report yesterday from China Business News.
“We’re seeing some positive risk taking in EM on the back of liquidity easing from the People’s Bank of China,” Amiya’s Wang said.
Indonesia today declared Widodo winner of the closest presidential election in a decade. Prabowo Subianto rejected the vote count. Investors may have to wait until as late as August for certainty on the nation’s next leader if an appeal is filed to the Constitutional Court. The rupiah ended a four-day rally, weakening 0.3 percent, while the Jakarta Composite Index sank 0.9 percent, halting a two-day gain.
The baht climbed to a eight-month high, gaining 0.4 percent, after Thailand’s exports rebounded and global funds increased investment in the nation’s assets. The SET Index fell 1.2 percent after it rose yesterday to a 13-month high.
The S&P BSE Sensex Index added 1.2 percent, increasing for a sixth day.