Stocks gain on hopes economy is recovering

Stocks gain on hopes economy is recovering
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First Published: Tue, Jul 14 2009. 09 12 PM IST

Upbeat: Two men reading data on a screen at a Shanghai brokerage on Monday. Investors say Asian markets are recovering the fastest.Aly Song / Reuters
Upbeat: Two men reading data on a screen at a Shanghai brokerage on Monday. Investors say Asian markets are recovering the fastest.Aly Song / Reuters
Updated: Tue, Jul 14 2009. 09 12 PM IST
London: Emerging market stocks on Tuesday gained the most in almost three weeks as commodities rallied and better-than-estimated profits from China to Russia bolstered speculation that the global economy is recovering.
Shanxi Guoyang New Energy Co. jumped 10% after the Chinese coal producer said first half profit may more than double. OAO Sberbank, Russia’s biggest lender, increased 4.7% on earnings that beat analysts’ estimates. South Korea’s won strengthened 1.8% against the dollar, the biggest gain since 30 April, and the rouble jumped the most in a month.
“I’d be buying on dips,” Michael Yoshikami, chief investment strategist at YCMNet Advisors, said in an interview on Bloomberg Television. “The long-term future is certainly China and emerging markets.”
Upbeat: Two men reading data on a screen at a Shanghai brokerage on Monday. Investors say Asian markets are recovering the fastest.Aly Song / Reuters
The MSCI Emerging Markets Index rose 2.5% to 740.77 as of 10.53am in London, the biggest intraday rally since 24 June. China’s Shanghai Composite Index advanced 2.1% and the Micex in Russia, the world’s biggest energy exporter, added 3.4%.
Every major equity benchmark index in Asia increased on Tuesday as Singapore upgraded its forecast for economic growth and fund manager Barton Biggs said some of the region’s markets are still attractive. Biggs, who runs New York-based hedge fund Traxis Partners Lp, said Chinese stocks are among the world’s best investments because the nation’s economic growth is poised to exceed forecasts.
“The emerging markets, particularly Asia, are the growth area of the world and they’re emerging from the financial crisis faster than any other part of the world,” Biggs, former chief global strategist for Morgan Stanley, said in an interview with Bloomberg Television. The extra yield investors demand to own emerging market bonds over US treasurys declined for the second day, dropping 4 basis points to 4.4 percentage points, according to JPMorgan Chase and Co.’s EMBI+Index.
China’s economy, the world’s third largest, may have expanded 7.8% in the second quarter, according to the median forecast of 20 economists in a Bloomberg survey. That compares with a 6.1% expansion in the previous three months from a year earlier. The government will announce the figure on 16 July.
The rouble strengthened 1% against the US currency, bolstered by oil’s rise above $60 a barrel.
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First Published: Tue, Jul 14 2009. 09 12 PM IST