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iShares MSCI Emerging Markets Index Fund
Emerging-market stocks climbed, trimming a weekly decline, on speculation China may take steps to boost economic expansion after growth slowed to the weakest in almost three years.
The MSCI Emerging Markets Index (MXEF) rose 0.2 percent to 1,026.50 at the close in New York, paring the gauge’s loss on the week to 1 percent. Sany Heavy Equipment International Holdings Co. (631) jumped the most in five months, leading industrial companies higher. South Korean stocks surged the most in a month after North Korea’s rocket launch failed minutes after liftoff. Mexico’s IPC stock index sank more than 700 points in less than five minutes near the end of trading, extending its loss today to 2.3 percent.
China’s gross domestic product increased 8.1 percent in the first quarter, the smallest gain since mid-2009 and less than the 8.4 percent growth predicted in a Bloomberg survey. News website Sina.com reported that China cut the amount of reserves some lenders need to keep on hand. Confidence among U.S. consumers fell in April from a one-year high in March, according to the Thomson Reuters/University of Michigan preliminary index of consumer sentiment.
Chinese authorities “are always going to be extremely responsive and take the initiative to do whatever it takes to support the economy,” Benoit Anne, chief emerging-market strategist at Societe Generale SA, said by phone from London. “We are seeing a very soft landing and signs that authorities including the central bank will be on the watch on the policy side.”
Infosys Ltd. (INFO), India’s second-largest software-services exporter, slumped 13 percent in Mumbai, the most in almost three years, after forecasting sales that missed analyst estimates.
A “systems error” caused the plunge in Mexico’s benchmark IPC gauge, said Alejandro Creixell, a managing partner at Bulltick Capital Markets in Mexico City.
The MSCI Emerging Markets Index has climbed 12 percent this year, beating a 7.3 percent advance in the MSCI World Index of developed nations. The gauge of developing nations is valued at 10.4 times estimated profit, compared with the MSCI World’s multiple of 12.3 times.
The IShares MSCI Emerging Markets Index exchange-traded fund (EEM), the most-traded ETF to track developing-nation shares, slid 1.5 percent to $42.16 in New York. 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 5.4 percent to 28.69.
China has cut reserve-requirement ratios for county-level banks by 100 basis points, or 1 percentage point, the state- backed Xinhua News Agency reported, citing unidentified people familiar with the matter. The amount major banks must set aside as reserves has been reduced twice by the same total amount since November, while ratios for Agricultural Bank of China Ltd.’s branches were reduced last month.
Industrial & Commercial Bank of China Ltd., the world’s biggest lender by market value, rose 3.2 percent in Hong Kong, the most in two months, after China bank lending surged the most in a year.
Sany Heavy, a Chinese maker of construction equipment, climbed 8.4 percent in Hong Kong after the National Bureau of Statistics said industrial production grew 11.9 percent in March, compared with 11.4 percent the previous two months.
The Hang Seng China Enterprises Index (HSCEI) of mainland stocks in Hong Kong gained 2.6 percent, the biggest jump since Feb. 2.
Brazil’s Bovespa slid 1.5 percent, widening the measure’s weekly loss to 2.5 percent. The gauge has fallen for four weeks, matching a losing streak that ended in November.
Hungary’s BUX Index (BUX) dropped 2.8 percent on concern disputes obstructing its international bailout bid will escalate. The country would consider it an act of “blackmail” if the International Monetary Fund were to pose political criteria for starting financial assistance talks and is ready to go to court to defend its position, Prime Minister Viktor Orban said in an interview on public radio MR1-Kossuth.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries rose five basis points, or 0.05 percentage point, to 360, according to JPMorgan Chase & Co.’s EMBI Global Index.
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