Bloomberg News

Emerging-Market Stocks Rise for Fourth Day on Manufacturing Data

January 03, 2012

Jan. 3 (Bloomberg) -- Emerging-market stocks gained for a fourth day after a pickup in manufacturing output boosted optimism the global economy is weathering Europe’s debt crisis.

The MSCI Emerging Markets Index surged 2.5 percent to 940.09 at 10:26 a.m. in New York, set for the highest close since Dec. 8 and the biggest gain in a month. The Bovespa index increased 2.3 percent in Sao Paulo. The Hang Seng China Enterprises Index of Chinese stocks traded in Hong Kong jumped 3 percent, the sharpest advance in a month. Benchmark measures surged at least 2 percent in South Korea, Turkey, India and Russia.

The Institute for Supply Management’s factory index rose to 53.9 in December from 52.7 a month earlier, the Tempe, Arizona- based group’s data showed today. Economists surveyed by Bloomberg News projected the gauge would climb to 53.5.

The Indian purchasing managers’ index climbed to 54.2 in December from 51 in the previous month, HSBC Holdings Plc and Markit Economics said in an e-mailed statement yesterday. In China, the measure rose to 50.3 from 49 over the same period, the Beijing-based logistics federation said in a statement on Jan. 1. A reading of more than 50 indicates expansion.

“China and India manufacturing indicators have topped consensus and led to modest but broad gains across most markets and commodities this morning,” Chris Weafer, chief strategist at Troika Dialog in Moscow, said in an e-mailed comment. “The best one can say about markets coming into 2012 is expectations are so low that any surprisingly good news, or even less bad than currently feared, could have an immediately positive impact on asset prices.”

In Europe, a gauge of Swiss manufacturing rose to 50.7 in December from 44.8 when adjusted for seasonal swings, Credit Suisse Group AG in Zurich said in an e-mailed statement today. That’s the first reading above 50 since August. A U.K. index rose to 49.6 from a revised 47.7.

U.S. Payrolls

A report this week will probably indicate that hiring in the U.S. accelerated in December, a sign that the country’s improving labor market will bolster consumer spending in early 2012. Payrolls climbed by 150,000 workers after rising 120,000 in November, according to the median forecast of 62 economists in a Bloomberg News survey before the Labor Department release on Jan. 6.

Crude oil surged 3.8 percent in New York as concern persisted that sanctions against Iran may lead to supply disruption.

Petrobras, Vale

Brazilian stocks advanced, following crude and metal prices higher. Oil company Petroleo Brasileiro SA added 2.6 percent and miner Vale SA rose 2.1 percent.

The ruble strengthened 1.5 percent as oil, Russia’s largest export earner, jumped. OAO Sberbank, Russia’s biggest lender, rose 3.5 percent in Moscow, helping the Micex Index increase 3 percent. The FTSE/JSE Africa All Share Index advanced 2.4 percent in Johannesburg as gold and copper prices moved higher.

Hungary sold three-month Treasury bills at 7.67 percent, the highest since August 2009, after lawmakers approved regulations Dec. 30 that reduced powers of the president of the central bank, despite opposition from the International Monetary Fund and the European Union. The BUX Index slid 0.9 percent and the forint weakened 0.4 percent against the euro.

Lawmakers in Prime Minister Viktor Orban’s Fidesz party last week approved a law that expands the rate-setting Monetary Council while curbing the power of Central Bank President Andras Simor. The IMF and the EU broke off talks on a bailout last month over the plan.

South Korea’s Kospi Index and India’s Sensex surged 2.7 percent each.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell thirteen basis points, or 0.13 percentage point, to 414, according to JPMorgan Chase & Co.’s EMBI Global Index.

--With assistance from Zachary Tracer in New York. Editor: Marie-France Han

To contact the reporter on this story: Ian Sayson in Manila at isayson@bloomberg.net; Jason Webb in London at jwebb25@bloomberg.net.

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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