Emerging Stocks Rise as Chinese Shares Gain on Housing OutlookNatasha Doff and Choong En Han
Emerging-market stocks gained a second day as Chinese equities rose on bets the government will accelerate measures to boost the housing market. Russia’s ruble climbed as the European Union delayed announcing new sanctions.
The MSCI Emerging Markets Index rose 0.3 percent to 1,078.12. The ruble appreciated 0.4 percent against the dollar. China Resources Land Ltd. paced gains for developers. The Ibovespa fell as Brazilian state-run companies declined. The rupiah gained the most among emerging-market currencies after Joko Widodo was named Indonesia’s next president. Turkey’s lira strengthened 0.8 percent, and South Africa’s rand increased 0.6 percent.
The Hang Seng China Enterprises Index has rebounded 18 percent from a March low as China accelerated railway spending, allowed some local governments to loosen property curbs and cut reserve-requirement ratios for smaller banks. The EU may restrict Russia’s access to capital markets unless President Vladimir Putin expedites the investigation into the downing of the Malaysian Air flight over eastern Ukraine.
“Russian markets have shrugged off the threat of tighter sanctions,” Neil Shearing, chief emerging-markets economist at Capital Economics, said by phone from London. “Fears of a debt-induced hard landing in China are overdone because the authorities have a large degree of control over the financial system.”
The developing-nation gauge has risen 7.5 percent this year and trades at 11.2 times 12-month projected earnings, data compiled by Bloomberg show. The MSCI World Index gained 5.6 percent and is valued at a multiple of 15.1.
Seven out of 10 industry groups in the MSCI Emerging Markets Index rose today. The Hang Seng China Enterprise Index jumped 2 percent to the highest close since December. China Resources Land rallied 7.5 percent, the most since December 2011.
Russia’s Micex Index closed little changed after swinging between a gain of 1.1 percent and a loss of of 0.7 percent. The ruble appreciated to 34.8374 against the dollar. Rebels downed two fighter jets in the east Ukrainian region of Donetsk, a Defense Ministry spokesman said.
The U.S. last week blocked OAO Rosneft, OAO Novatek, OAO Gazprombank and Vnesheconombank from accessing U.S. equity or debt markets for new financing with maturities longer than 90 days. A widened list of EU sanctions will be announced on July 24.
The Ibovespa fell 1 percent. Oil producer Petroleo Brasileiro SA fell 3.8 percent, leading a decline among state-controlled companies after a voter poll indicated that President Dilma Rousseff would win in a possible election run-off.
The premium investors demand to own emerging-market debt over U.S. Treasuries decreased five basis points to 264, according to JPMorgan Chase & Co. indexes.
Shares in Saudi Arabia extended a rally after the country’s market regulator said foreign institutional investors will have direct access to the Arab world’s biggest bourse in 2015. The benchmark Tadawul All Share Index increased 1.4 percent to the highest level since February 2008.
Indonesia’s rupiah added 0.9 percent and the Jakarta Composite Index gained 0.2 percent. Widodo said he’s aiming for a growth pace Indonesia hasn’t seen since before the Asian financial crisis. He won 53.15 percent of support at the July 9 vote.
Thailand’s SET Index jumped 1.4 percent, the most since June 2. Taiwan’s market was closed because of a typhoon.