Emerging-Market Stocks Rise as Chinese Shares Gain; Ruble Falls

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Emerging-market stocks rose as Chinese shares gained the most in two years on bets their world-beating rally will continue. The ruble fell as Russia’s president called for “harsh” measures to deter speculators.

China Petroleum & Chemical Corp. and PetroChina Co. jumped more than 7 percent in Hong Kong. The Shanghai Composite Index rallied 4.3 percent. Abu Dhabi’s ADX General Index climbed 0.8 percent. The ruble fell 2 percent as President Vladimir Putin urged the central bank and government to coordinate defense of the currency. The Ibovespa sank on concern Brazil’s economic growth will falter.

The MSCI Emerging Markets Index rose 0.1 percent to 986.91. China’s market rally is spurring mainland investors to open stock accounts at the fastest pace in three years and sending trading values to records. The European Central Bank left its interest rates unchanged in a meeting today. ECB President Mario Draghi said policy makers will wait until next quarter before assessing if additional stimulus measures are needed.

The surge in China “appears to be largely based on retail-leveraged accounts even as overall system credit growth slows,” Emad Mostaque, a London-based strategist at Ecstrat Ltd., said by e-mail. “This can take the market further, but eventually someone needs to pay the piper.”

Five out of 10 industry groups in the developing-nation gauge rose, led by telecommunication stocks. Hong Kong’s Hang Seng China Enterprises Index rallied 3.8 percent to a one-year high. PetroChina surged the most since May 2009, while China Petroleum & Chemical jumped the most since Feb. 20.

Ruble’s Drop

The ruble appreciated more than 2 percent earlier today after the central bank reduced the rate it charges banks to borrow foreign currency in a bid to slow the currency’s slide and ease a dollar shortage. It reversed gains to trade at 54.29 per dollar as Putin defended Russia’s annexation of Crimea in his state of the nation address and called for an amnesty on capital returning to the country.

“At the moment both the government -- via verbal interventions -- and the central bank -- via mild FX interventions -- are desperately trying to stabilize the currency, but act like a toothless tiger,” Bernd Berg, a London-based strategist at Societe Generale SA, said by e-mail. “Any ruble rebound is followed by renewed selling pressure. Unless they come up with some more drastic measures the ruble decline will continue or even intensify.”

The dollar-denominated RTS Index of Russian stocks fell 3.2 percent after erasing a gain of 2.2 percent. The benchmark Micex Index decreased 1.5 percent.

Brazilian Stocks

The Ibovespa retreated 1.7 percent in Sao Paulo. Homebuilder Rossi Residencial SA fell the most on the gauge, declining 7 percent after the central bank yesterday increased borrowing costs. Economists covering Brazil cut their forecast for growth next year to 0.77 percent from 0.80 percent, according to the median of about 100 estimates in a central bank survey published Dec. 1.

Hungary’s benchmark equities index climbed 0.7 percent. Turkish stocks gained 1.6 percent.

The premium investors demand to own emerging-market debt increased three basis points to 319 basis points, JPMorgan Chase & Co. Indexes show.

Citic Securities Co. jumped to the highest level since January 2010 amid prospects that the recent surge in trading will boost profits. The Shanghai Composite posted its steepest increase since December 2012, extending gains to 19 percent over the past month, the most among 93 global equity indexes.

China Volumes

Trading volumes in the Shanghai index were 85 percent higher than the 30-day average. The gauge has risen 37 percent this year on bets the central bank will cut lenders’ reserve-requirement ratios after reducing interest rates for the first time in two years last month.

Abu Dhabi’s stock index gained the most since Nov. 10, while shares in Saudi Arabia, the world’s biggest oil exporter, jumped 1.8 percent.

The MSCI emerging-markets gauge has fallen 1.6 percent this year and trades at 11.2 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has gained 4.6 percent in the period and is valued at 15.5 times.