New York - The iShares MSCI Emerging Markets Index exchange-traded fund rose to a four-month high and Brazil’s Ibovespa led gains in equities as the Federal Reserve unexpectedly refrained from reducing its monthly bond purchases.
The developing-nation ETF climbed 4.2 percent to $43.28 at 4 p.m. in New York, the highest level since May 21.
The MSCI Emerging Markets Index fell 0.1 percent to 1,000.99.
Brazil’s Ibovespa climbed 2.6 percent as homebuilders surged, while the real led gains among 24 developing-nation currencies tracked by Bloomberg.
Mexico’s IPC index extended a three-day rally to 2.7 percent.
Russia’s ruble strengthened for an 11th day.
US Federal Reserve chairman Ben S. Bernanke and his policy making colleagues refrained from paring stimulus as rising borrowing costs show signs of slowing the four-year expansion.
The measure for stocks in developing nations has slid as much as 16 percent since May 22, when the Fed signaled its asset-buying program could be trimmed if the economy showed sustained improvement.
“The Fed slapped the market on the wrist, saying ’you got ahead of yourself here,’” Burt White, chief investment officer who helps oversee $390 billion at LPL Financial in Boston, said by phone.
“It’s very good news for stocks, and it’s great news for emerging market stocks.”
Consumer-staple and financials shares in the MSCI Emerging Markets Index gained, while technology stocks retreated.
The measure for developing markets extended this year’s slump to 5.1 percent, trading at 10.6 times projected earnings, according to data compiled by Bloomberg.
That trails the 14.1 valuation of the MSCI World Index.
The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, lost 5.7 percent to 22.87.
Brazil’s Ibovespa closed at the highest level since May 28, as Rossi Residencial SA jumped 8.6 percent.
Mexico’s IPC index advanced 1.9 percent.
The Micex Index dropped from the highest level in six months, led by OAO Gazprom and OAO Lukoil.
The ruble rose against the central bank’s target dollar-euro basket, reversing earlier losses.
The Budapest Stock Exchange Index snapped a three-day rally and benchmark stock gauges in Poland, Turkey and the Czech Republic also retreated.
The Shanghai Composite Index rose for the first time in four days. Shanghai Lujiazui Finance & Trade Zone Development Co. and CTS International Logistics Corp. added 10 percent on speculation Shanghai’s free-trade zone will lift demand for trade and shipping.
Poly Real Estate Group Co. advanced after new home prices surged in the nation’s four major cities.
Tencent Holdings Ltd., China’s No. 1 Internet company, retreated 3.9 percent, while shareholder Naspers Ltd. led declines in Johannesburg.
The S&P BSE Sensex advanced the most in a week as State Bank of India, the nation’s biggest lender, led an industry gauge to its highest level since July 26. Power producer NTPC Ltd. climbed to a two-month high.
The premium investors demand to own emerging-market debt over US Treasuries rose four basis point, or 0.04 percentage point, to 335 basis points, according to JPMorgan Chase & Co. - Bloomberg News