Bloomberg News

Emerging-Market Stocks Rise on U.S. Data as Mexico Climbs

March 26, 2013

Emerging-market stocks rose for a second day, led by Mexico (MEXBOL), amid better-than estimated American economic reports. Brazilian equities rebounded from an eight- month low as exporters followed commodities higher.

Mexico’s IPC Index had the biggest rally since January 2012 as Fomento Economico Mexicano SAB surged 4.4 percent. Steelmaker Usinas Siderurgicas de Minas Gerais SA jumped 4.5 percent, pacing gains in Brazil. Kasikornbank Pcl (KBANK), a Thai lender, rose 3.4 percent as Deutsche Bank AG advised buying the nation’s shares. OTP Bank Nyrt., Hungary’s largest lender, rose as the central bank cut the benchmark rate to a record low.

The MSCI Emerging Markets Index (MXEF) added 0.6 percent to 1,028.65 in New York. Data showing U.S. durable-goods orders an home prices rose more than forecast bolstered the outlook for the world’s biggest economy. Cypriot Finance Minister Michael Sarris sought to play down calls for the nation to exit the euro after Cyprus mooted a new rescue plan.

“The U.S. economy is going to continue to grind along,” said Peter Sorrentino, a senior fund manager at Huntington Asset Advisors in Cincinnati who helps oversee $14.7 billion. He spoke in a phone interview. “That would argue for stronger import demand, which may be helping out emerging markets.”

Gauges of consumer companies rose the most among 10 industries in the MSCI Emerging Markets Index. The broader gauge has lost 2.5 percent this year, compared with a 7 percent gain in the MSCI World Index (MXWO) of developed-country stocks. The developing-nations measure trades at 10.8 times estimated 12- month earnings, compared with the MSCI World’s multiple of 14.2, according to data compiled by Bloomberg.

Emerging ETF

The iShares MSCI Emerging Markets exchange-traded fund (EEM:US), the ETF tracking developing-nation shares, added 1.4 percent to $42.52. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, tumbled 9.8 percent to 16.86.

The IPC Index rallied 1.8 percent after U.S. data bolstered the outlook for the Latin American nation’s biggest export market. Fomento Economico Mexicano rose the most in a year.

Brazil’s Bovespa added 1.5 percent. Usiminas, as Usinas Siderurgicas is known, gained the most since March 6. The Standard & Poor’s GSCI Index of commodities added 0.9 percent, climbing for a third day.

The BUX Index added 0.8 percent as OTP Bank (OTP) jumped 2.2 percent in Budapest. The Magyar Nemzeti Bank cut its two-week deposit rate to 5 percent today, matching the estimate of 25 of 29 economists surveyed by Bloomberg.

Turkey, Russia

Turkey’s ISE National 100 index added 1.5 percent, as Turkiye Garanti Bankasi AS gained 2.4 percent.

Russian stocks fell 0.8 percent to the lowest since Dec. 4 as Cyprus’ bailout plan cast doubt on the safety of an estimated $60 billion of loans and deposits in the island nation.

Thailand’s SET Index (SET) climbed 1.3 percent, after tumbling 7.5 percent last week. Deutsche Bank said in a report dated yesterday that recent declines in share prices are an opportunity to add shares selectively. Morgan Stanley said in a separate report yesterday that the recent slide is overdone. Kasikornbank rose to the highest price since March 19.

Zhen Ding Technology Holding Ltd. (4958) rose the most on the emerging-markets gauge, adding 6.9 percent. The Taiwanese circuit-board maker stands to benefit as a supplier to Apple Inc. on speculation the next generation iPhone will be unveiled soon, according to Fubon Securities Co.

Indian stocks rose for the first time in eight days. The rupee weakened as Bank of America Merrill Lynch predicted a record current-account deficit. The Shanghai Composite Index lost 1.3 percent on concern official measures to rein in home prices will hurt earnings.

The extra yield investors demand to own developing-nation dollar debt over U.S. Treasuries rose one basis point, or 0.01 percentage point, to 301, according to the JPMorgan Chase & Co. EMBI Global Index.

To contact the reporters on this story: Maria Levitov in London at mlevitov@bloomberg.net; Julia Leite in New York at jleite3@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net


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Companies Mentioned

  • EEM
    (iShares MSCI Emerging Markets ETF)
    • $38.84 USD
    • 0.27
    • 0.7%
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