Bloomberg News

Most Emerging Market Stocks Gain on U.S. Jobless Claims, Europe

December 29, 2011

Dec. 29 (Bloomberg) -- Most Emerging-market stocks rose as concern Europe’s debt crisis will hurt global growth eased after Italian borrowing costs declined at an auction and after a U.S. report showed initial jobless claims rose more than estimated.

The MSCI Emerging Markets Index dropped 0.1 percent to 912.39 as of 11:11 a.m. in New York, as 422 companies gained and 336 fell. Brazil’s Bovespa index rose 0.4 percent while Mumbai’s Sensitive Index, or Sensex, retreated 1.2 percent. The FTSE/JSE Africa All Share Index fell 0.3 percent in Johannesburg. Russia’s Micex advanced for the first time in three days.

Italy sold 7.02 billion euros ($9.06 billion) of debt due from 2014 to 2022, less than its original target of as much as 8.5 billion euros, as borrowing costs declined in its final debt sale of the year. A U.S. Labor Department report showed that first applications for unemployment benefits increased to 381,000 last week, while median forecast of 32 economists surveyed by Bloomberg News had called for 375,000 claims.

“People are still generally cautious with what is happening in Europe,” said Bharat Joshi, who helps manage $5 billion at Kuala Lumpur-based Aberdeen Asset Management Sdn. “People are waiting at the sidelines. The U.S. recovery has been showing signs of positive traction.”

The MSCI Emerging Market Index has lost 21 percent this year as Europe’s debt problems compounded concerns about slowing global growth. Shares on the developing nation index are trading at 10 times estimated earnings, compared with 12.1 times on the MSCI World Index, which has fallen 8.5 percent this year.

Brazil, Russia

The Bovespa advanced, paring its first annual decline since 2008, after Brazil’s broadest price index fell in December.

Consumer-goods maker Hypermarcas SA rose 2.8 percent. Lupatech SA, Brazil’s biggest provider of oil equipment and services, advanced after saying it will sell as much as 700 million reais ($374 million) of new stock.

The Micex Index climbed 0.4 percent in Moscow, led by OAO GMK Norilsk Nickel. Russia’s largest miner rose 2.9 percent after the company said on its website it plans to increase capital spending at least 7 percent and will exceed $3 billion in 2012.

The ruble weakened 1.2 percent against the dollar while the lira and the rand appreciated 0.5 percent against the U.S currency.


Anglo American Plc, a mining company that accounts for more than 9 percent of South Africa’s benchmark stock index, fell 0.9 percent as gold tumbled a third day.

China’s Shanghai Composite Index rose 0.2 percent, reversing an earlier loss of 0.6 percent, as low valuations and anticipation of policy easing boosted buying interest, according to Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management Co.

The People’s Bank of China may reduce lenders’ reserve requirements after New Year’s Day, according to a commentary in the China Securities Journal today. The central bank last cut reserve ratios by 50 basis points to 21 percent with effect from Dec. 5.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell one basis point, or 0.01 percentage point, to 416, according to JPMorgan Chase & Co.’s EMBI Global Index.

The Markit iTraxx SovX CEEMEA Index of eastern European, Middle East and Africa credit-default swaps rose three basis points to 350, according to data provider CMA.

--With assistance from Tal Barak Harif in New York, Zhang Shidong in Shanghai. Editors: Marie-France Han

To contact the reporter on this story: Gan Yen Kuan in Kuala Lumpur at; Jason Webb in London at

To contact the editor responsible for this story: Darren Boey in Hong Kong at

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