Emerging stock rally gains ground
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London - Emerging-market stocks rose for a fourth day, heading for the longest stretch of gains since October, as corporate profits in China beat estimates while the highest US consumer confidence since 2008 boosted sentiment.
The MSCI Emerging Markets Index added 1 percent to 967.96 at 11:19 a.m. in London, the highest level since March 7.
A gauge of Chinese shares in Hong Kong climbed 1.6 percent.
China Mengniu Dairy Co. surged the most in 10 months after posting larger profits.
Russia’s Micex Index climbed to a one-week high and the ruble strengthened for a fourth day versus the dollar. India’s rupee rallied to an eight-month high.
Agricultural Bank of China Ltd., the nation’s third-largest lender, reported higher earnings and improved margins.
Data today will show higher US durable goods orders and faster services growth, economists estimate.
The International Monetary Fund will deliver an assessment to Ukraine on its bailout request as the US musters support for penalising Russia for its annexation of Crimea.
“News flow on the positive side, combined with low valuations and oversold markets, is luring some investors back to” developing nations, Hertta Alava, the head of emerging markets at FIM Asset Management Ltd. in Finland, said by e-mail.
“There have been some good corporate results in China. Russia is seeing a bit of a relief rally after things haven’t escalated more in Ukraine.”
The emerging-markets gauge has fallen 3.6 percent this year and trades at 8.6 times projected 12-month earnings, data compiled by Bloomberg show.
The MSCI World Index is little changed in 2014, and is valued at 14.7 times.
All 10 industry groups in the developing nation gauge climbed, led by technology stocks and energy companies.
Samsung Electronics Co., which gets about 30 percent of its sales from America, gained 3.1 percent in Seoul, the most since February 21.
OAO Gazprom, the world’s largest producer of natural gas, climbed 3 percent in Moscow, while Johannesburg-based Sasol Ltd. added 2.2 percent.
The Micex jumped 1.9 percent, following yesterday’s 2 percent gain, led by increases in Gazprom and OAO Sberbank, the nation’s biggest lender. The ruble rose 0.5 percent against Bank Rossii’s target basket of dollars and euros.
Ukrainian bonds advanced, pushing the yield on the nation’s 2023 note down 14 basis points to 9.46 percent, the least since February 24.
The hryvnia slid 1.8 percent, its eighth days of declines, on speculation the IMF will force it to devalue.
Battling dwindling reserves and the threat of its third recession since 2008, Ukraine is seeking a loan of $15 billion to $20 billion, Finance Minister Oleksandr Shlapak said yesterday.
Prime Minister Arseniy Yatsenyuk has pledged to take any steps needed to obtain the lifeline.
Equity gauges in Poland and Hungary added at least 1.1 percent.
Turkey’s Borsa Istanbul 100 Index rose 1.7 percent led by banks after the central bank said it may consider paying interest on a portion of their required reserves.
The Hang Seng China Enterprises Index has climbed 7 percent since entering a bear market on March 20.
The Shanghai Composite Index dropped 0.2 percent, snapping a three-day gain.
Morgan Stanley is sticking to its buy recommendation on Chinese stocks, saying concern that there’ll be a “significant market disruption” in the world’s second-largest economy is overstated, according to a report dated yesterday.
AAC Technologies jumped 12 percent in Hong Kong, the most in more than two years, after UBS and Daiwa Securities upgraded the stock.
The manufacturer of acoustic components said yesterday fourth-quarter net income topped estimates.
Of the 78 stocks on the MSCI China Index that posted annual earnings this month and for which Bloomberg had estimates, 48 percent beat profit projections and 52 percent missed.
The Conference Board’s index of US consumer confidence rose to 82.3 in March from 78.3 a month earlier, the New York-based research group said yesterday.
The median forecast in a Bloomberg survey of economists was 78.5.
Economists in a separate Bloomberg poll predict a report tomorrow will show US gross domestic product grew at a 2.7 percent annualised rate from October through December, compared with the government’s estimate of 2.4 percent issued last month.
The rupee advanced 0.6 percent on speculation the world’s largest democracy will elect a government capable of reviving economic growth when voters head to the polls April 7.
The South Korean won gained 0.4 percent, the most in more than a week, while the rand added 0.2 percent. - Bloomberg News