Emerging-Market Stocks End Two-Day Drop on China Economic Growth

Emerging-market equities rose for the first time in three days, led by Chinese financial stocks after the nation’s economy expanded faster than estimated.

The Shanghai Composite Index climbed 1.8 percent following a 7.7 percent plunge yesterday. Petroleo Brasileiro SA advanced for the third time in four days as the Brazilian state-run oil company decided against raising fuel prices. The Borsa Istanbul 100 Index jumped 1.4 percent after Turkey’s central bank cut the key interest rate. India’s S&P BSE Sensex rallied to a record. Drugmaker Gedeon Richter Nyrt. jumped in Budapest after announcing positive test results.

The MSCI Emerging Markets Index advanced 0.5 percent to 957.28. China’s gross domestic product expanded 7.3 percent in the three months through December from a year earlier, compared with the median estimate of 7.2 percent in a Bloomberg News survey. The European Central Bank may unleash a program of quantitative easing this week.

“The market on the Chinese mainland recovered today after yesterday’s even bigger plunge,” Leopold Quell, a co-fund manager at Raiffeisen Capital Management in Vienna, said by e-mail.

Investors withdrew $2.39 billion from U.S. exchange-traded funds that focus on emerging markets so far in January, almost twice the pace that ended last year.

The developing-nation gauge is little changed this year and trades at 10.7 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has fallen 1.4 percent in 2015 and is valued at a multiple of 15.6.

Financial Stocks

The International Monetary Fund made the steepest cut to its global-growth outlook in three years, with diminished expectations almost everywhere except the U.S., more than offsetting the boost to expansion from lower oil prices.

Nine out of 10 industry groups in the emerging-markets index rose today, led by financial stocks. Haitong Securities Co. and Citic Securities Co. gained at least 5.9 percent in Hong Kong.

The Micex Index dropped 0.3 percent in Moscow as declines in natural-gas exporter OAO Gazprom and lender OAO Sberbank outweighed a 7.3 percent rally in OAO Inter RAO UES. Depositary receipts of Eurasia Drilling Co. surged 66 percent in London as Schlumberger Ltd. said it will pay $1.7 billion for a stake in Russia’s largest driller.

The Ibovespa gained 0.3 percent in Sao Paulo. Petroleo Brasileiro increased 1.4 percent. The oil producer decided to keep fuel prices unchanged after the government announced tax increases.

Turkish Rates

Turkey’s benchmark stock index rose for a second day. Turkish Airlines surged 7.2 percent, the steepest gain since November.

The central bank reduced its one-week repo rate by 50 basis points to 7.75 percent, while keeping overnight borrowing and lending rates unchanged. Analysts expected the bank to maintain all three rates, according to median estimates in three separate Bloomberg surveys.

Hungarian stocks rose 2.9 percent. Richter gained 3.6 percent as tests for Cariprazine, a drug being developed for the treatment of patients with schizophrenia and bipolar disorder, were positive.

The Hang Seng China Enterprises Index climbed 2.3 percent after slumping the most since November 2011 yesterday. The Shanghai Composite index rebounded as PetroChina Co. added 3.4 percent. Chinese equities plunged yesterday following regulatory efforts to rein in margin lending.

India’s Sensex advanced 1.9 percent after the IMF said the nation will be world’s fastest-growing major economy in the year through March 2017.

The ringgit slid 1 percent against the dollar after Malaysia said the budget deficit will be 3.2 percent of gross domestic product compared with an October target of 3 percent. The government also cut its economic growth forecast for this year.

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