Emerging-market stocks advanced for a second week as oil neared a ten-month high and data from the U.S. to South Korea signaled economic growth around the world may be steadying.
The MSCI Emerging Markets Index (MXEF) rose 0.8 percent to 1,067.56 at the close in New York, pushing it 0.5 percent higher over the past week, the second straight weekly advance. Russian shares jumped to the highest level in almost seven months as OAO Lukoil (LKOH), the biggest non-state oil company, jumped the most in more than two years. Petroleo Brasileiro SA (PETR4) climbed 2.3 percent in Sao Paulo and PetroChina Co. (601857), China’s biggest oil company, gained 1.2 percent.
New home sales in the U.S. exceeded analysts’ estimates, Commerce Department data showed, a day after jobless claims held at a four-year low. Consumer confidence also improved in the U.S., South Korea and France. Oil reached the highest price since May 3 after a seven-day advance, as escalating tension with Iran threatens supplies and on speculation an expanding global economy will boost demand.
“There are mounting supply side constraints and therefore the risk to oil prices is clearly skewed to the upside,” Benoit Anne, head of emerging-market strategy at Societe Generale SA, said by phone from London. “The market has clearly picked that up and it’s clearly focused on that today.”
Crude oil for April delivery rose $1.94, or 1.8 percent, to $109.77 a barrel on the New York Mercantile Exchange, the highest settlement since May 3. Oil may rise next week as sanctions against Iran tighten, according to a Bloomberg News survey of analysts.
The MSCI Emerging Markets Index has gained 17 percent this year, while the MSCI World Index (MXWO) of developed nations advanced 10 percent. Companies on the gauge of developing countries trade at 10.9 times estimated earnings, below the 12.9 multiple for the MSCI World.
The iShares MSCI Emerging Markets Index exchange-traded fund, the most-traded ETF that tracks developing nation-shares, gained 1 percent to $44.19.
U.S. new home sales fell 0.9 percent to a 321,000 annual pace in January, above the median estimate for 315,000 in a Bloomberg survey. Applications for U.S. jobless benefits were unchanged in the week ended Feb. 18 at 351,000, the fewest since March 2008. The Thomson Reuters/University of Michigan final index of consumer sentiment increased to 75.3 in February from 75 last month.
The Bovespa stock index gained 0.2 percent, the first rise this week. Petroleo Brasileiro’s 2.3 percent jump was the biggest in a week.
Russia’s Micex Index (INDEXCF) added 3.7 percent as 29 of 30 members advanced. OAO Gazprom (GAZP), the country’s gas export monopoly, gained 3.6 percent and Lukoil jumped the most since October 2009.
The ruble appreciated 1.7 percent to 29.1850 per dollar, the most among 25 emerging-market currencies tracked by Bloomberg, and the strongest since Sept. 2. Poland’s zloty is the best performer this week, gaining 2.8 percent versus the dollar.
South Korea’s Kospi Index (KOSPI) added 0.6 percent, its biggest rise in a week, as the central bank said consumer confidence jumped to a three-year high. The Shanghai Composite index rose for a sixth day, boosting gains for the week to 3.5 percent.
Indian stocks had their first weekly loss this year on concern oil price gains may fuel inflation, preventing the Reserve Bank of India from easing monetary policy. The BSE India Sensitive Index (SENSEX), or Sensex, slid 0.9 percent today, extending its weekly loss to 2 percent.
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