Emerging-market equities rallied for the first time in five days as China’s main index entered a bull market on signs of an Asian economic recovery. Egyptian shares plunged as political talks broke down.
Haitong Securities Co. (600837), China’s second-biggest listed brokerage, jumped 7.3 percent, helping the Shanghai Composite Index climb more than 20 percent from a Dec. 3 low. Braskem SA (BRKM5) led gains on the MSCI Emerging Market Latin America Index, which added 1 percent. Indian bond yields declined as the central bank cut key interest rates and shekel weakened after Bank of Israel Governor Stanley Fischer said he will step down.
The MSCI Emerging Markets Index added 0.7 percent to 1,069.88 in New York, rebounding from a four-week low, and the iShares MSCI Emerging Markets Index (EEM:US) exchange-traded fund climbed the most since Jan. 2. South Korean manufacturers’ confidence rose for a second month, data today showed, while a Jan. 27 report showed profits for Chinese industrial companies gained for a fourth month in December.
“China is maturing much faster than any of us could possibly have anticipated, and it’s a very exciting place to be,” Donald Gimbel, senior managing director of Carret Asset Management LLC, which oversees about $1.5 billion, said by phone from Champagne, Illinois. “The nay-sayers are beginning to come around.”
The iShares MSCI Emerging Markets ETF rose 1.1 percent to $44.34 in New York. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index (VXEEM), a measure of options prices on the fund and expectations of price swings, fell for the first time in four days, dropping 0.8 percent to 18.05.
Braskem, Latin America’s largest petrochemical maker, jumped 5.2 percent to its highest close in four months. Brazil’s Bovespa index (IBOV:US) added 0.6 percent as speculation a stronger real will help curb inflation boosted consumer stocks.
Brazil’s two largest pulpmakers declined in Sao Paulo, with Suzano Papel e Celulose SA sliding 3.8 percent and Fibria Celulose SA (FIBR3) losing 1 percent. Mexico’s IPC Index was little changed, while Argentina’s Merval Index (MERVAL) climbed 3.8 percent to the highest level since July 2011.
Confidence among U.S. consumers declined more than forecast in January, reaching the lowest level in more than a year as higher payroll taxes took a bigger bite out of Americans’ paychecks, data today showed. The S&P/Case-Shiller index of property values rose in November from a year earlier by the most in more than six years, indicating the U.S. housing rebound is gaining ground.
South Korea’s Kospi index gained 0.8 percent, the most since January 2. The Shanghai Composite climbed 0.5 percent, extending its advance since Dec. 3 to the threshold signaling a bull market to some investors. The Philippine Stock Exchange Index added 0.7 percent to a record close.
Chinese stocks traded in the U.S. also rallied, with the Bloomberg China-US Equity Index (CH55BN) jumping 0.9 percent in a second day of gains. American depositary receipts of Beijing-based electricity producer Huaneng Power International Inc. climbed 3.4 percent to a five-year high.
South Africa’s FTSE/JSE Africa All Shares Index (JALSH) also rose to a record in Johannesburg as a year-to-date rout in the rand boosted shares in mining companies that generate sales in dollars but pay for costs in South African currency. The rand gained 0.8 percent against the dollar, trimming its yearly slide to 6.6 percent.
Egypt’s benchmark EGX 30 sank 2 percent, the most among benchmark indexes worldwide, after the country’s main opposition bloc rejected talks with President Mohamed Mursi, indicating the political crisis may be prolonged.
Russia’s Micex Index (INDEXCF) rose 0.8 percent in Moscow during the day as oil, the nation’s biggest export earner, surged to a four-month high in New York. The Istanbul Stock Exchange National 100 Index added 1.2 percent, the most in two weeks. The Czech Republic’s PX index gained 0.7 percent, the biggest jump in four weeks.
Israel’s benchmark bond yields rose to the highest level in two months in Tel Aviv, while the shekel lost 0.1 percent versus the dollar after Fischer’s resignation. A former Citigroup Inc. vice-chairman and International Monetary Fund executive, Fischer helped Israel’s economy recover from the global financial crisis while keeping inflation in check. The Bloomberg Israel-US Equity Index (ISRA25BN) slid 0.3 percent to 85.11.
Yields on India’s 10-year bond fell two basis points, or 0.02 percentage point, to 7.85 percent. The Reserve Bank of India reduced the nation’s repurchase rate today to 7.75 percent from 8 percent.
Yields on Hungarian three-year bonds slid nine basis points to 5.48 percent, the lowest level since May 2010, after policy makers cut the main interest rate for a sixth month. The Hungarian forint strengthened 0.6 percent versus the euro, halting its longest losing streak in eight months.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell two basis points to 254 basis points, according to JPMorgan Chase & Co.’s EMBI Global Index.
Polskie Gornictwo Naftowe i Gazownictwo SA, Poland’s biggest gas distributor, lost 1.6 percent in Warsaw after Wood & Co. downgraded the stock to sell and Parkiet newspaper reported Poland’s antitrust regulator is probing the company’s natural- gas sales contracts.
OAO Aeroflot, Russia’s biggest airline carrier, sank 3.2 percent, the first decline in nine days, after Vedomosti newspaper reported that the company may delay a secondary public offering, citing a company official that it didn’t identify.
Gauges of technology stocks and consumer discretionary companies advanced at least 1.7 percent, the most among 10 industry groups in the MSCI Emerging Markets Index. (MXEF) The broader measure has added 1.4 percent this year, trailing a 5.4 percent increase in the MSCI World Index. The developing-nations gauge trades for 11 times estimated profit, compared with the MSCI World’s multiple of 13.7, data compiled by Bloomberg show.
Kia Motors Corp. (000270), South Korea’s second-largest carmaker, surged 5.1 percent from its lowest level since November 2010, snapping a four-day slump. Hyundai Motor Co. (005380) rose 4 percent, in its first advance in four days.
Industrial & Commercial Bank of China (601398) Ltd., the world’s largest lender by market value, slid 2.2 percent in Hong Kong after Goldman Sachs Group Inc. sold a stake in the lender at a discount. The shares were sold at HK$5.77 each, 3 percent lower than the Chinese bank’s HK$5.95 closing price in Hong Kong yesterday, Goldman said, without disclosing the number of shares.
Cheil Worldwide Inc. (030000), a South Korean advertising company, jumped 7.4 percent in Seoul, the biggest gainer in the MSCI emerging-markets measure. The company said yesterday it’s seeking to buy back shares between Jan. 30 and April 29, according to a regulatory filing.
Unitech Ltd., an Indian developer, dropped 6 percent in Mumbai, the most since Jan. 24, to become the worst performer on the emerging-markets index.
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