File picture: Alex Grimm

London - Emerging-country stocks climbed for a seventh day as tensions in Russia and Iraq eased and US housing starts rose.

The MSCI Emerging Markets Index added 0.5 percent to 1,082.07 at 2:25 pm in London, heading for the strongest close since January 2013.

Lenders including Turkiye Garanti Bankasi AS and Akbank TAS led a second day of gains in the Borsa Istanbul 100 Index.

The Micex index extended the longest stretch of advances since September 11 as OAO Moscow Exchange rose to the highest level in almost six weeks.

Data today showed US housing starts surged in July to the highest level in eight months, underscoring the recent pickup in builder optimism as the residential real-estate market gains some traction.

The Red Cross said it is close to working out details of a safe-passage plan for a Russian aid convoy in southeastern Ukraine, while Kurdish and Iraqi forces seized control of Iraq’s largest dam from Islamic State militants.

“Some of the geopolitical tensions which had rattled the markets over the last couple of weeks seem to be easing, with regards to Ukraine in particular,” William Jackson, an economist at Capital Economics Ltd., said by phone from London.

Turkey is seeing a “relief rally” after underperforming since presidential elections won by Recep Tayyip Erdogan, he said.


Stock Valuations


The developing-market gauge has increased 7.9 percent this year and is valued at 11.2 times projected 12-month earnings, the most expensive level since April 2011, according to data compiled by Bloomberg.

The MSCI World Index has gained 4.1 percent in 2014 and trades at a multiple of 14.9.

The Micex rose 0.8 percent today, heading for the highest close since July 17.

OAO TMK jumped 3.5 percent as OAO Rusnano said it plans to buy new shares issued by the steel pipe producer.

The ruble fell 0.3 percent versus the dollar.

Ukrainian government forces have taken control of one of four districts in the pro-Russian separatist stronghold of Luhansk and are fighting in the city centre, a military spokesman said.

Turkey’s Borsa Istanbul 100 Index surged 2.6 percent, the biggest climb among its developing-country peers.

Garanti Bankasi gained 3.7 percent to the highest in more than a week, while Akbank soared 5 percent, the most since April.

The gauge fell 3.2 percent last week, the third consecutive drop for the period, while the lira lost 1 percent.

Erdogan, who must step down as premier when he’s sworn in as president August 28, has pressured the central bank to cut interest rates.

All 10 industry groups in the emerging-market measure increased, led by a 0.7 percent advance in a gauge of consumer- discretionary companies.

The premium investors demand to own developing-country debt over US Treasuries was little changed at 284, according to JPMorgan Chase & Co. indexes.

The Shanghai Stock Exchange Composite Index increased 0.3 percent.

Equity indexes in South Korea and Philippine climbed at least 0.7 percent, while India’s S&P BSE Sensex Index gained 0.1 percent. - Bloomberg News