Emerging Stocks Rise for Second Day on China Plan; Ruble DropsNatasha Doff and Elena Popina
Emerging-market stocks gained for a second day on bets China is boosting measures to support growth. The ruble fell after Moody’s Investors Service cut Russia’s credit rating.
China Citic Bank Corp. and China Minsheng Banking Corp. increased at least 1.3 percent in Hong Kong. Stocks in Taiwan and South Korea rose from eight-month lows as technology shares rebounded. Oil & Natural Gas Corp. rallied 5.5 percent in Mumbai. The ruble slid 0.7 percent versus the dollar. The Ibovespa fell 2.6 percent as a voter poll showed Brazil’s presidential election was tied.
The MSCI Emerging Markets Index rose 0.5 percent to 981.50. China’s central bank is said to plan to inject about 200 billion yuan ($32.7 billion) into some national and regional lenders. The Bank of Russia sold $2.12 billion on Oct. 16 to support the ruble. Sanctions over Ukraine have exacerbated a dollar shortage as oil’s slide the past month dimmed the outlook for the world’s biggest energy exporter.
“Anything that benefits the Chinese economy has positive ramifications throughout many other financial markets,” Timothy Ghriskey, who helps manage about $1.5 billion in assets as chief investment officer at Solaris Asset Management LLC in New York, said by phone. “Investor sentiment toward Russia has been negative for quite some time, and the downgrade is another negative factor that weighs on investor confidence in the country.”
The MSCI All-Country World Index advanced for a second day after a six-day slump. Markets had retreated on concern a potential recession in Europe will curb growth as the U.S. Federal Reserve pares stimulus. A European Central Bank board member said last week covered bond purchases would begin in the next few days.
MSCI’s developing-nation gauge has dropped 2.1 percent this year and trades at 10.6 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has fallen 2.1 percent and is valued at a multiple of 14.2.
Equities in Turkey gained 1.1 percent to the highest level since Sept. 24, the only increase among major markets in eastern Europe, led by consumer-discretionary and industrial shares.
Nine out of 10 industry groups in the emerging-market gauge advanced as technology companies jumped 1.8 percent. Samsung SDI Co., a battery maker, surged 9.5 percent in Seoul after Edaily reported the company will build an energy storage plant in China.
South Korea’s Kospi index added 1.6 percent, the most since Nov. 15, while the Taiex Index rose 1.8 percent for its steepest gain since July 2013.
The Hang Seng China Enterprises Index climbed 0.6 percent. China Citic Bank advanced for a fourth day, while China Minsheng increased the most since Sept. 3. The Shanghai Composite Index jumped 0.7 percent.
The People’s Bank of China is providing funds to joint-stock banks to help them prepare for year-end liquidity needs, a government official familiar with the matter said on Oct. 17, asking not to be identified because there hasn’t been an official announcement.
India’s S&P BSE Sensex rose 1.2 percent in the second day of advances. The country freed diesel prices of state controls for the first time in more than a decade and raised natural gas tariffs over the weekend to curb one of Asia’s widest budget deficits.
The Micex Index declined 0.6 percent in Moscow as concern that sanctions over Ukraine will remain in force outweighed a rebound in oil prices.
The ruble weakened for the second time in three days versus the dollar. The country’s credit rating was cut to the second-lowest investment grade by Moody’s, which cited sluggish growth prospects and an erosion of the country’s reserves.
The Ibovespa declined the most among global equity gauges. Brazilian stocks fell as a poll showed President Dilma Rousseff statistically tied with her opponent Aecio Neves in this weekend’s election runoff, damping speculation that a new administration will do more to rekindle growth after the economy fell into a recession in the first half of the year.
The Jakarta Composite Index added 0.2 percent as Joko Widodo was sworn in as Indonesia’s seventh president. Dubai’s DFM General Index fell 1 percent after a 3.5 percent surge yesterday.
The premium investors demand to own emerging-market debt over U.S. Treasuries was unchanged at 318 basis points, JPMorgan Chase & Co. indexes show.