Emerging-market stocks rose to the highest level in a week after reports showing growth in China’s services industries last month and a climb in U.S. factory orders in February boosted global optimism.
The MSCI Emerging Markets Index (MXEF) gained 0.8 percent to 1055.63 at the close in New York, led by consumer discretionary and industrial companies. PT Bank Danamon Indonesia (BDMN:US) led gains, surging 39 percent after DBS Group Holdings Ltd. (DBS) offered to buy the lender for about $7.2 billion. Brazil’s Anhanguera Educacional Participacoes SA (AEDU3) reached the highest level in five months. Russia’s Micex index (INDEXCF) rose the most in three weeks, led by OAO Mechel (MTLR).
China’s non-manufacturing industries expanded in March at a faster pace than in February, according to data from the National Bureau of Statistics and the China Federation of Logistics and Purchasing. Factory orders in the U.S. rose 1.3 percent in February, after falling a revised 1.1 percent in January, a Commerce Department report showed. The February data trailed the median forecast by 0.2 percentage points.
“You continue to have moderately improving macroeconomic data, both in the U.S. and emerging markets,” Tim Hall, who manages $700 million at Deltec Asset Management in New York, said by phone. U.S. economic growth indicators are “enough to appease the market at the moment.”
The IShares MSCI Emerging Markets Index exchange-traded fund (EEM:US), the most-traded ETF that tracks developing-nation shares, fell 0.6 percent to $43.29, after earlier gaining as much as 0.5 percent.
The loss deepened as U.S. Federal Reserve minutes showed central bankers saw no need for more monetary stimulus unless economic growth slows.
The Chicago Board Options Exchange Emerging Markets ETF Volatility Index (VXEEM), a gauge of options prices on the fund and expectations of price swings, rose 1.1 percent to 25.51.
Emerging-market stocks have advanced 15 percent this year, compared with 11 percent gains for developed-nation shares. The MSCI developing-nation gauge trades at 10.7 times estimated earnings, compared with the 12.8 multiple for developed-country stocks.
Brazil’s Bovespa slipped 1.4 percent as oil producers followed crude lower. OGX Petroleo & Gas Participacoes SA (OGXP3) lost 5.6 percent. Anhanguera, the country’s largest education company, rose 5.8 percent.
Russian gross domestic product expanded 4.8 percent in the fourth quarter from a year earlier after an upwardly revised 5 percent in the previous three months, the Federal Statistics Service said in an e-mailed statement today. The Economy Ministry had estimated growth at 4.9 percent.
The Micex index gained 1.8 percent as Mechel (MTLR) rose 3.9 percent. OAO Sberbank (SBER), the nation’s biggest bank, gained 2.9 percent.
The Jakarta Composite Index (JCI) jumped 1.2 percent as Danamon, owned by Singapore’s state-investment company Temasek Holdings Pte, jumped the most since April 1999 after DBS offered to buy the lender in Southeast Asia’s biggest banking deal.
The Kospi Index (KOSPI) gained 1 percent in Seoul. Hyundai Motor Co. (005380), South Korea’s biggest carmaker, rose 6.3 percent to a record as the company sold 382,659 vehicles in March, an 18 percent increase from a year earlier, according to a regulatory filing.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell twelve basis point, or 0.12 percentage point, to 331, according to JPMorgan Chase & Co.’s EMBI Global Index.
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