Emerging stocks set to advance

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Emerging-market stocks headed for their second weekly gain led by technology shares on speculation the strengthening U.S. economy will boost demand for exports from developing nations. The Micex Index ended a 10-day rally.

Samsung Electronics Co. rose 1 percent as a tech gauge climbed after dropping the most in two weeks yesterday. The Shanghai Composite Index posted its longest weekly winning streak since 2012. The Micex ended its longest stretch of gains in almost nine years and the ruble weakened on concern an aid convoy will stoke more tension with Ukraine. The hryvnia slid 2.4 percent, extending this month’s biggest drop worldwide.

The MSCI Emerging Markets Index added 0.3 percent to 1,085.11 at 1:04 p.m. in London, taking gains this week to 1 percent. Data from housing to manufacturing yesterday signaled the U.S. economy is accelerating. Federal Reserve Chair Janet Yellen speaks today at a symposium in Jackson Hole, Wyoming as investors look for clues on the timing of higher interest rates.

“Decent data out of the U.S. yesterday helped external demand for emerging-market exports,” Michael Wang, a emerging- markets strategist in London at Amiya Capital LLP, said by e- mail. “The halting of the aid convoy is negative for emerging- market risk sentiment.”

All but two of 10 industry groups in the developing-nation gauge rose, led by a 1 percent advance in the information technology measure. The premium investors demand to own developing-country debt over U.S. Treasuries climbed one basis point to 281, according to JPMorgan Chase & Co. indexes.

RUBLE DROPS

A Bloomberg gauge tracking 20 developing-nation currencies was little changed as it headed for a 0.5 percent weekly drop. The ruble weakened 0.6 percent to 36.2240 per dollar, the largest retreat among 24 developing countries monitored by Bloomberg.

The Micex fell 1.7 percent in Moscow. Mail.Ru Group Ltd. tumbled the most in more than five months in London after the operator of a social networking site cut its full-year sales forecast amid a slowdown in advertising spending as sanctions against Russia threaten to exacerbate an economic slowdown.

The hryvnia slid to 13.55 per dollar, taking this month’s drop to 9.4 percent. Russia is invading under the cover of aid trucks, Valentyn Nalyvaychenko, the head of Ukraine’s security council, said on TV5. Ukraine said the convoy moved into the country without its consent.

The Russian gauge rallied 9.6 percent in the previous 10 days on bets a meeting between President Vladimir Putin and his Ukrainian counterpart next week will reduce tension. Declines today were “stoked by the news of the convoy entering Ukraine without permission,” Neil Shearing, the chief emerging-market economist at Capital Economics Ltd., said by phone from London.

STOCK VALUATIONS

Today’s gain boosted the 2014 advance for the MSCI Emerging Markets Index to 8.2 percent, beating the 4.7 percent increase in the MSCI World Index. The rally pushed developing-country valuations to 11.3 times projected 12-month earnings, near the highest since 2011, compared with a multiple of 15 for the MSCI World.

The South Korean won strengthened 0.6 percent, the most in more than a week, while the Malaysian ringgit and Indian rupee appreciated by at least 0.3 percent.

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong climbed 1.1 percent, while the Shanghai Composite Index added 0.5 percent, extending gains this week to 0.6 percent, its sixth week of advances. Taiwan’s Taiex Index rose 1.4 percent, the most since Oct. 3, while Indian shares rose to a record, paced by increases in Infosys Ltd.

Bloomberg


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