Emerging stocks headed for the biggest advance in a month, led by Brazilian equities, as commodity producers surged after data showing slower ination in China eased pressure for monetary tightening.
Bloomberg report showed that the MSCI Emerging Markets Index added 0.8 percent to 1,015.51 by 12:18 p.m in New York last Tuesday, rebounding from the lowest level since November 30. China’s inflation eased more than forecast from a 10-month high as food-price gains ebbed, reducing pressure on policy makers to tighten credit as the world’s second-largest economy recovers from a slowdown.
“Investors’ perceptions on emerging markets have been so negative, so even with a little good news, the market can rebound easily,” Soni Wibowo, a director at PT Bahana TCW Investment Management which manages about 22 trillion rupiah ($2.3 billion) in assets, told Bloomberg from Jakarta.
China National Building Material Company jumped 5.8 percent in Hong Kong, while Drake & Scull International PJSC sent Dubai shares to the highest level since 2009. OAO Lukoil, Russia’s biggest non-state oil company, added 2.1 percent. Brazil’s Bovespa (IBOV) index gained a third day as iron-ore producer Vale SA rallied. ailand’s baht breached 29 per dollar for the rst time since 1997 and South Korea’s won rebounded.
Commodity shares rose the most among 10 groups in the MSCI Emerging Markets Index (MXEF), adding 1.8 percent. The broader index has lost 3.8 percent this year, compared with a 6.8 percent gain in the MSCI World Index (MXWO) of developed-country stocks. The developing-nations measure trades at 10.6times estimated 12- month earnings, compared with the MSCI World’s multiple of 13.8, according to data compiled by Bloomberg.
e MSCI BRIC Index of stocks in the biggest emerging markets surged 1.5 percent. e iShares MSCI Emerging Markets Index exchange-traded fund rose 1.1 percent to $42.16. e Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a gauge of options prices on the fund and expectations of price swings, slid 4.7 percent to 17.87. Brazil’s Bovespa added 1.8 percent as exporters rallied
