Emerging Stocks Advance on IPad Outlook to Putin TalksNatasha Doff and Harry Suhartono
Emerging-market stocks advanced as Apple Inc. suppliers rallied on a report they are preparing to manufacture a new iPad and as the leaders of Russia and Ukraine began discussions to end separatist fighting.
TPK Holding Co., a maker of touch screens for Apple, jumped 5.4 percent in Taipei while Catcher Technology Co. rose to a record. United Co. Rusal climbed in Moscow after posting a profit for the first time in five quarters while Petroleo Brasileiro SA surged to a 23-month high. The lira strengthened after Turkey’s central bank kept its benchmark interest rate on hold. The MSCI Emerging Markets Index added 0.5 percent to 1,093.74 in New York, its 12th day of gains in the past 13 days.
Stocks joined a global rally after U.S. data showed the biggest-ever jump in durable-goods orders, adding to signs the recovery in the world’s biggest economy is gathering pace. Apple is preparing its largest-ever iPad, with production scheduled to commence by the first quarter of next year, according to people with knowledge of the matter. Equities advanced after President Vladimir Putin said talks with his Ukrainian counterpart yesterday had been “positive.”
The discussions on Ukraine were “enough to reduce fears of further escalation in the very near term at least,” Anders Svendsen, an economist at Nordea Bank Denmark A/S in Copenhagen, said by phone. “Markets are still seeing good news from the U.S. as good news and not something that brings a rate hike closer.”
Global equities reached a record $66 trillion in value yesterday as the Standard & Poor’s 500 Index rose above 2,000. Shares worldwide added more than $2.2 trillion in value since Aug. 7, according to data compiled by Bloomberg.
All 10 industry groups in the emerging-markets index increased, led by telecommunications and energy companies. The premium investors demand to own developing-country debt over U.S. Treasuries narrowed two basis points to 278, according to JPMorgan Chase & Co. indexes.
A Bloomberg gauge tracking 20 developing-nation currencies increased 0.2 percent in its second day of gains. The lira strengthened 0.5 percent to 2.1540 per dollar.
Central bank Governor Erdem Basci, under government pressure to cut borrowing costs to bolster the economy, kept the benchmark repurchase rate unchanged while unexpectedly cutting the upper lending rate by 75 basis points. South Africa’s rand and the Malaysian ringgit rose at least 0.4 percent.
The Ibovespa climbed 1.9 percent, the most among major Americas equity benchmarks as a Brazilian election poll showed Marina Silva, who favors reversing the fiscal policies of President Dilma Rousseff, would win in a runoff. Petrobras added 4.6 percent, contributing the most to the gauge’s advance, on bets a change in government would reduce intervention in state-controlled companies.
The Ukrainian Equities Index rose for the first time in four days. Ukrainian President Petro Poroshenko said Russia backed a peace strategy to stem fighting between the army and pro-Russian insurgents.
Economists are pushing their forecasts for Ukraine’s recession lower after months of separatist fighting that’s killed more than 2,000 people. The hryvnia was little changed today after slumping 9.7 percent against the dollar this month, the most in the world. The ruble is down 1.3 percent in the period.
Rusal, the world’s largest aluminum producer, closed at the highest level since January 2013 in Moscow after posting a $116 million profit in the three months ended June 30. The Micex Index climbed 0.3 percent.
Company earnings have “shown that weaker ruble is helping exporters across the board and the Russian consumer stayed resilient in the first half,” Anastasia Levashova, who helps manage $500 million in emerging-market equities at Blackfriars Asset Management Ltd. in London, said by e-mail. “The full effect of sanctions will be visible only in the second half of 2014 and first half of 2015, and I would not underestimate the negative effect.”
TPK Holding surged to a one-month high, while casing maker Catcher Technology added 2.3 percent in Taipei. The new iPad will have a screen measuring 12.9 inches diagonally, people with knowledge of the matter said. The Cupertino, California-based company has been working with suppliers for at least a year to develop a new range of larger touch-screen devices, they said.