Johannesburg - Emerging-market stocks headed for a third weekly gain as a rally in Indian shares offset concern China’s slowdown is deepening.
The rupee rose as the main opposition alliance looked set for the biggest win in 30 years.
ICICI Bank Ltd. led a 0.9 percent jump in Indian equities to a record and the rupee advanced. Indonesia’s JCI Index climbed for a fifth day.
China’s small-company stocks sank, dragging the benchmark index down more than 20 percent from its February peak.
The PX Index in Czech Republic was set for its longest losing streak this year as central bank minutes showed concern a “substantial” increase in the inflation rate is missing from economic recovery.
The MSCI Emerging Markets Index rose 0.1 percent to 1,030 at 1:06 p.m. in London, extending its gain this week to 2.3 percent.
Narendra Modi’s opposition bloc was leading in enough seats to win a parliamentary majority in India’s election, having vowed to revive economic growth.
A report showed Chinese banks had the biggest quarterly increase in bad loans since 2005 as a slowdown caused defaults to rise.
“Modi is renowned for corporate governance,” Raj Kothari, a London-based fixed-income trader dealing in emerging-markets assets at Sun Global Investment Ltd., said by phone.
“His win will create a lot of inflows, and we expect to see the further appreciation in the rupee. Modi will likely be here for 5-to-10 years.”
The developing-nation gauge has gained 2.7 percent this year and trades at 10.7 times projected 12-month earnings, data compiled by Bloomberg show.
The MSCI World Index has risen 1 percent in 2014, and is valued at 14.7 times.
The S&P BSE Sensex surged as much as 6.2 percent in early trading before falling as low as 0.1 percent.
It rebounded to close at a record.
Election Win
The Bharatiya Janata Party and its allies lead in 334 of 543 seats where results are available, enough for a majority, according to NDTV television station.
The value of Indian equities has climbed by $332 billion since the BJP named Narendra Modi as its candidate for prime minister on September 13.
Foreign investors poured $14.2 billion into the nation’s shares during the period, while bullish wagers in the options market outnumbered bearish bets by the widest margin in 14 months, amid speculation Modi will do more than the ruling Congress Party to revive economic growth.
The forint strengthened 0.2 percent, paring a 1 percent decline yesterday, as Adam Balog, vice-president at the central bank, told Magyar Nemzet newspaper it was hard to determine how much longer would Hungary’s easing cycle continue as the current 10 basis-point rate cuts aren’t having a substantial impact on inflation.
The BUX Index in Budapest rose 0.4 percent.
Turkey Falls
The PX gauge in Prague slid for a seventh day, down 0.3 percent in its longest stretch of losses since December 10.
Economic recovery in the Czech Republic hasn’t been accompanied by an increase in the inflation rate, leaving the central bank more inclined to maintain a cap on the koruna at 27 per euro, the regulator said today in minutes from its May 7 monetary policy meeting.
Turkey’s Borsa Istanbul 100 Index fell 0.5 percent as the lira depreciated a third day against the dollar.
Police used tear gas to disperse thousands of protesters after at least 284 people died in the nation’s worst mine accident.
Labor unions declared a strike and demonstrators took to the streets of major cities.
Poland’s WIG30 Index lost 0.5 percent, set for a one-week low.
Four out of 10 industry groups in the emerging-markets measure rose, led by utility and telecom companies.
Gauges of consumer and health-care shares showed the biggest declines. South Korea’s Kospi climbed 0.3 percent to a five-month high.
China Loans
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong slipped 0.2 percent, paring its weekly gain to 2.8 percent.
The ChiNext index lost 2.2 percent in Shenzhen after tumbling 21 percent from a record high on February 17.
The Shanghai Composite Index added 0.1 percent.
Non-performing loans rose by 54 billion yuan ($8.7 billion) in the three months through March to 646.1 billion yuan, the highest level since September 2008, according to data released by the China Banking Regulatory Commission yesterday.
Equity gauges in Vietnam and Indonesia rose at least 0.8 percent.
The yield on Thailand’s 10-year government bonds dropped to the lowest in almost a year before data that will probably May 19 gross domestic product shrank 2.2 percent in the first quarter from the previous three months, according to the median forecast in a Bloomberg News survey.
Army chief Prayuth Chan-Ocha said yesterday the military may need to use force to counter any escalation of violence linked to the nation’s six month-old stalemate, after attacks on anti-government protesters left three people dead and 22 wounded. - Bloomberg News