Emerging Assets Rally as Stimulus Outlook Supports Risk Demand
- Brexit concern softens as odds of U.S. rate increase diminish
- Currencies from South Africa to Brazil advance for second day
Anticipating Fed Actions Post Brexit Decision
Emerging-market stocks and currencies rose for a second day as speculation mounted that the Federal Reserve will pause its tightening cycle and other nations will follow South Korea’s lead in increasing stimulus after Britons voted to leave the European Union.
The developing-nation equity benchmark jumped the most since late March, further narrowing the decline posted in the wake of last week’s U.K. referendum. The Kospi Index advanced after South Korea announced plans for extra budget spending. The Ibovespa rallied as better-than-forecast labor data added to optimism that Brazil will pull out of its worst recession in a century. Aviation stocks dragged down Turkey’s main stock gauge after a deadly terror attack on Istanbul’s main airport. The yuan advanced for the first time in a week as Chinese authorities stepped in to support the exchange rate.