Emerging-Market Stocks End Five-Day Drop on China; Ruble Rallies

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Emerging-market stocks rose for the first time in six days as regulators said an exchange link between Hong Kong and Shanghai will start in a week.

The Shanghai Composite Index jumped to a three-year high. The ruble strengthened 2.3 percent after Russia’s central bank pledged to limit local-currency funding to ward off speculators. The BUX Index added 2.9 percent in Budapest, led by OTP Bank Plc, as the government said the conversion of foreign-currency mortgages will be based on the central bank’s official forint exchange rate on Nov. 7. Brazil’s real gained 0.3 percent.

The MSCI Emerging Markets Index advanced 0.8 percent to 995.83 at 2:01 p.m. in New York. The exchange link between Hong Kong and Shanghai will debut on Nov. 17, giving foreign investors unprecedented access to China’s $4.2 trillion equity market. Russian central bank Governor Elivra Nabiullina said the ruble’s slide has gone too far.

The Shanghai-Hong Kong exchange link “is a sign that China wants to develop its capital markets and eventually liberalize its capital account,” Michael Wang, an emerging-market strategist in London at Amiya Capital LLP, said by e-mail. Markets in Europe, the Middle East and Africa are up on “stronger oil and stabilization in the ruble,” he said.

The developing-nation gauge has fallen 0.7 percent this year and trades at 11 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has risen 3.1 percent in the period and is valued at a multiple of 15.1.

Industry Groups

Nine of the 10 industry groups in the developing-country gauge climbed today, led by technology shares. MediaTek Inc. surged 5.9 percent in Taipei on higher monthly sales. Samsung Electronics Co. increased 5.1 percent in Seoul.

The ruble rose to 45.61 versus the dollar in its second day of gains. Russia’s currency depreciation has no fundamental basis and volatility will ease as the central bank steps up the fight against speculation, President Vladimir Putin said at meeting in Beijing with International Monetary Fund Managing Director Christine Lagarde.

OAO Sberbank gained 2.8 percent, leading the benchmark Micex Index’s 1.2 percent advance. Natural-gas producer OAO Gazprom increased 0.5 percent. China and Russia deepened their energy ties with a second deal that lessens Russian reliance on Europe and would secure almost a fifth of the gas supplies China needs by the end of the decade.

The real strengthened to 2.5507 per dollar. The currency gained on speculation President Dilma Rousseff will appoint a new economic team that will move away from policies that helped lead Brazil into a recession in the first half of the year.

The Ibovespa fell 0.7 percent. Planemaker Embraer SA tumbled 3.6 percent, the worst performance on the Brazilian benchmark, after the airline Azul said it may cancel a jet order valued at $1.87 billion.

A gauge tracking emerging-market currencies versus the dollar rose 0.3 percent.

Hungary Loans

Hungary’s benchmark stock index surged the most since March 17. OTP Bank added 5.1 percent. The government is set to draw up a bill on mortgage-loan conversions, which may also be based on the average exchange rate of the period since the supreme court made its decision on foreign-currency loans.

Prime Minister Viktor Orban’s government has sought to penalize banks for spreading foreign-currency loans over the past decade, with borrowers struggling to repay them since 2008 after the forint’s plunge raised installments. The currency appreciated 0.7 percent versus the euro today, the second-steepest advance among developing-country peers.

Dubai’s DFM General Index surged 2.8 percent after losing 3.1 percent last week. Saudi Arabian stocks rose 1.1 percent.

China Link

The Shanghai Composite jumped 2.3 percent, the most since July 28. The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong advanced 0.7 percent. Bourses in Hong Kong and Shanghai will begin trading through the program, which allows a net 23.5 billion yuan ($3.8 billion) a day in cross-border purchases, next week, regulators said in a joint statement.

Data showed China’s factory-gate prices fell for a record 32nd month in October. Chinese exports rose more than estimated last month, sparking concern over fake invoicing as imports expanded less than expected.

South Korea’s won climbed 0.8 percent as below-forecast U.S. jobs data weighed on the dollar. The Taiex Index added 1.5 percent to a one-month high. The Kospi index advanced 0.9 percent.

The premium investors demand to own developing-country debt over U.S. Treasuries narrowed five basis points to 304 basis points, according to JPMorgan Chase & Co. indexes.