Emerging-Market Stocks Rebound as Crude Gain Lifts Energy Shares

Emerging-market stocks ended a three-day decline as a rebound in crude prices boosted energy companies, outweighing data showing economic weakness in Russia and China.

Petroleo Brasileiro SA, the Brazilian oil producer that is the subject of a corruption investigation, led a 1.6 percent gain in the Ibovespa. Sasol Ltd. rallied the most in six weeks in Johannesburg. OAO Tatneft jumped 5.5 percent in Moscow. Chinese stocks fell for a fifth day after the country’s official manufacturing index slid below 50 for the first time since 2012. A separate Russian gauge slipped to a 5 1/2-year low, pushing the ruble down as much as 2.3 percent. The currency reversed losses as Brent jumped following its best week in four years.

“A bounce in the oil price is sending a positive growth signal to the market,” Tony Hann, the head of emerging markets at Blackfriars Asset Management Ltd. in London, said by e-mail. Data out of China “could affect emerging-market sentiment in the short term, but the notion that China’s economy is slowing surely cannot now be a surprise to many,” he said.

The MSCI Emerging Markets Index gained 0.2 percent to 963.80. Stocks on the measure sell for an average 11.4 times projected 12-month earnings, a 28 percent discount to developed-country equities in the MSCI World Index.

The drop in China’s Purchasing Managers’ Index below the level that signals a contraction fueled speculation that Asia’s largest economy will need to join the latest wave of global monetary easing to shore up sentiment. The Bank of Russia’s move to cut its key interest rate by 2 percentage points to 15 percent on Friday undermined investors’ confidence.

Oil Rebound

Six out of 10 industry groups in the emerging-markets gauge rose, led by a 1.6 percent increase in energy companies. Sasol climbed 6.8 percent. Tatneft jumped in Moscow as the benchmark Micex Index slid 1.4 percent. Petroleo Brasileiro jumped 5.9 percent from an 11-year low. Brent crude increased 3.3 percent to $54.75 a barrel.

Following the oil rebound today, the ruble climbed 0.7 percent. Russia’s PMI fell to 47.6 last month from 48.9 in December, HSBC Holdings Plc said Monday.

The lira, which slid to a record on Friday, rose 0.4 percent to 2.4314 per dollar. It had weakened after Turkey’s central bank said it may convene a meeting on Feb. 4 if data tomorrow show inflation fell by at least 1 percentage point.

ETF Outflows

Investors pulled almost $1.4 billion out from U.S. exchange-traded funds that invest in emerging markets during January, even as money started returning in the second half of the month.

China’s PMI fell to 49.8 last month from 50.1 in December, missing the median estimate of 50.2 in a Bloomberg survey of analysts. The slide follows the biggest weekly stock market drop in a year and fiscal data that showed the weakest revenue growth since 1991. The Shanghai Composite Index slid 2.6 percent, taking this year’s decline to 3.3 percent.

“China’s economy has been the biggest risk for equities investors this year,” Jeffrosenberg Tan, a money manager at PT Sinarmas Asset Management, said by phone from Jakarta. “This will have a ripple effect on other emerging economies, particularly in Asia.”

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