Emerging Stocks Climb for Second Day as Oil Boosts Energy SharesNatasha Doff and Ian Sayson
Emerging-market stocks climbed for a second day and currencies rallied with bonds as a rebound in crude prices lifted energy producers and Greece’s retreat from its call for a debt writedown fueled appetite for riskier assets.
OAO Lukoil jumped 3.7 percent in Moscow, while Sasol Ltd. advanced to a two-month high in Johannesburg. Petroleo Brasileiro SA paced a 2.8 percent gain in Brazilian stocks. Lenovo Group Ltd. gained the most since April 2013 in Hong Kong after its earnings beat estimates. Russia’s ruble led emerging-market currencies higher against the dollar.
The MSCI Emerging Markets Index rose 1.3 percent to 976.50. Oil rose for a fourth day, moving into a bull market on speculation crude’s collapse to the lowest level in almost six years will prompt producers to scale back output and reduce a glut. Greece’s government dropped calls for a debt writedown in favor of a debt exchange, according to a person who attended a meeting of about 100 financiers in London late on Monday.
“It is some relief that the Greek leadership has become a bit more nuanced in the past days,” Maarten-Jan Bakkum, an emerging-market strategist at ING Groep NV in The Hague, said by e-mail. “Oil prices have been rising, that takes some pressure off the energy exporters and the liquidity environment for EM remains good.”
Nine of 10 industry groups in the emerging-market index rose, led by a 4.7 percent advance by energy producers. Cnooc Ltd. climbed the most in a month in Hong Kong. Petrobras jumped 15 percent, the biggest gain since September 1998. Emaar Properties PJSC led a 2.5 percent rally in Dubai stocks. Equity indexes in Abu Dhabi and Qatar climbed at least 1.3 percent
Brent crude climbed 5.8 percent to $57.91 a barrel. That’s more than 20 percent higher than it’s Jan. 13 settlement.
The ruble strengthened 5 percent and Russian bonds rallied as higher oil prices eased pressure on the nation’s finances. The Finance Ministry will offer 10 billion rubles ($153 million) of floating-rate notes on Wednesday, double the size of last week’s plan, after Russia’s borrowing costs fell to a seven-week low.
The premium investors demand to hold emerging-market debt over U.S. Treasuries narrowed 16 basis points to 377 basis points, according to JPMorgan Chase & Co. indexes. A gauge of developing-nation currencies increased 1.2 percent.
Turkey’s lira strengthened 1.2 percent against the dollar after the country’s central bank said policy makers won’t convene for an emergency rates meeting. A January slowdown in consumer inflation failed to meet the lender’s criteria for an emergency cut.
Lenovo, a Chinese maker of personal computers and smartphones, jumped 7.3 percent in Hong Kong. The company posted a $253 million profit in the quarter ended December, exceeding the $182.4 million average of analysts’ estimates compiled by Bloomberg.
The Shanghai Composite Index climbed 2.5 percent, halting a five-day, 7.5 percent slump, as financial companies rallied amid speculation the government will take steps to bolster economic growth. The central bank injected 90 billion yuan ($14.4 billion) into the money markets today to avoid a cash crunch amid new share offerings and before lunar new year holidays.
MSCI’s developing nation gauge has gained 2.1 percent this year and is valued at 11.6 times 12-month projected earnings. The MSCI World Index has gained 0.3 percent in 2015 and trades at a multiple of 16.2.