Emerging-market stocks rose, sending the benchmark index to a three-week high, as an agreement on emergency aid for Greece and better-than-forecast U.S. economic data boosted appetite for riskier assets.
Hyundai Motor Co. (005380), which got 20 percent of its 2011 sales from Europe, gained the most in three weeks in Seoul. Power utility Centrais Eletricas Brasileiras SA (ELET6) rallied as Brazil considered raising the amount of compensation offered to companies that accept lower electricity rates. Unitech Ltd. (UT), a New Delhi-based real estate developer, led the gains on the developing-nations equities gauge, rallying 11 percent.
The MSCI Emerging Markets Index (MXEF) added 0.1 percent to 996.44, the highest since Nov. 7. European finance ministers agreed to cut rates on Greece’s bailout loans, suspend interest payments for a decade and gave the nation more time for repayments. The gauge pared gains after Senate Majority Leader Harry Reid said Democrats and Republicans have made little headway in negotiations over how to avoid $607 billion in tax increases and spending cuts set to take effect in 2013.
“Better news on the economic front in the U.S. is certainly helping and you also have the Greece deal,” Aryam Vazquez, an economist at Wells Fargo & Co., said by phone from New York. “But anytime you get negative comments from political leaders that speak to the possibility that we may be pushed over the fiscal cliff, this carries adverse repercussions for international financial markets.”
Brazil’s Bovespa Index retreated 0.9 percent as billionaire Eike Batista’s OGX Petroleo e Gas Participacoes SA slumped 3.7 percent to a four-year low on concern its $270 million purchase of an oil field stake will cut into cash holdings.
The BSE India Sensitive Index jumped 1.6 percent, the most in two months, as Moody’s Investors Service reiterated its stable outlook on the nation’s Baa3 debt rating, the lowest investment grade.
The Shanghai Composite Index (SHCOMP) fell 1.3 percent, closing below 2,000 for the first time since 2009, while Russia’s Micex Index fell 0.7 percent. The FTSE Bursa Malaysia KLCI Index slid 0.6 percent to its lowest close since June 28.
The iShares MSCI Emerging Markets Index exchange-traded fund (EEM:US), the ETF tracking developing-nation shares, fell 0.8 percent in New York. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, gained 1.4 percent.
South Korea’s Kospi Index added 0.9 percent as Morgan Stanley said the gauge may rise 21 percent by the end of next year. Taiwan’s Taiex Index rose 0.3 percent, with average trading volume 42 percent above the average after Economic Daily News reported the nation’s regulators plan to ease rules on intraday trading.
China’s yuan strengthened 0.05 percent to 6.2223 per dollar, a 1 percent premium to the central bank’s daily fixing, the maximum it’s allowed to fluctuate, according to the China Foreign Exchange Trade System.
Demand for goods such as machinery and electronics in the U.S. climbed in October by the most in five months, the Commerce Department reported today in Washington. Orders for all durable goods were little changed, beating the median forecast of economists surveyed by Bloomberg that projected a 0.7 percent drop. Consumer confidence in the world’s biggest economy climbed to a four-year high and home prices increased by the most since 2010.
Consumer-goods producers and industrial stocks rose the most among the 10 industry groups in the emerging-markets gauge.
“The agreement over Greece lifts away some of the concern that Europe’s crisis will worsen and it’s helping boost sentiment across regions,” Allan Yu, who helps manage about $10.26 billion at Metropolitan Bank & Trust (MBT) Co. in Makati City, Philippines, said in a phone interview today.
The 21 countries in MSCI’s developing-nations gauge send about 26 percent of their exports to the European Union on average, data from the World Trade Organization show.
India’s rupee rebounded from a 2 1/2-month low against the dollar as Moody’s said the country’s rating is supported by economic growth. The Philippine peso appreciated for a seventh day, its longest winning streak since January, on speculation Filipinos working overseas will send more money home as the year-end holidays approach.
The emerging markets stock index has risen 8.7 percent this year, trailing a 9.9 percent gain by the MSCI World Index of developed-country shares. The gauge of developing-nation stocks trades for 11.5 times estimated earnings, compared with the MSCI World’s multiple of 13.4, data compiled by Bloomberg show.
Eletrobras, as Centrais Eletricas is known, jumped 3.4 percent in Sao Paulo. The government may reconsider the 19 billion reais ($9.1 billion) it proposed to compensate utilities for next year’s renewal of generation and transmission contracts, according to an official who asked not to be identified because the information isn’t public.
Hyundai Motor, South Korea’s largest automaker, advanced 3.7 percent, the most since Nov. 6. Daelim Industrial Co. (000210) surged 7.8 percent, the biggest advance in 13 months.
Eurocash SA (EUR), Poland’s biggest distributor of non-durable consumer goods, dropped 7.4 percent, the worst performer in the emerging-markets benchmark. Volumes were 13 percent of the 3- month average, according to data compiled by Bloomberg.
Unitech rose to the highest level since April 17. Foreign investors have been buyers of local shares in India for all but one day this month, bringing net purchases in 2012 to $19.2 billion. That’s the most among 10 Asian markets tracked by Bloomberg, excluding China.
KGHM Polska Miedz SA (KGH), the best-performing stock in Poland’s WIG20 Index this year, slumped 3.6 percent, snapping a three-day advance. Citigroup cut the stock to sell from neutral, saying the shares are overvalued. KGHM has rallied 60 percent in 2012, compared with a 12 percent increase for the benchmark index.
China Rongsheng Heavy Industries Group Holdings Ltd. (1101) sank 6.7 percent in Hong Kong to the lowest since Oct. 19, while Glorious Property Holdings Ltd. (845) fell 3.2 percent, its steepest loss in a month. Zhang Zhirong quit as chairman of both companies after an investment firm he controlled agreed to pay $14 million to resolve U.S. insider-trading claims.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell four basis points, or 0.04 percentage point, to 292 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.
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