London: Emerging market stocks rose for a second day after higher earnings at technology companies from India’s HCL Technologies Ltd. to iPod maker Apple Inc. bolstered confidence in the global economic recovery.
The MSCI Emerging Markets Index climbed 0.5% to 1,028.05 at 9:51am in New York. South Korea’s won led gains in currencies versus the dollar, strengthening 0.9% for the biggest rally in a week. The Mexican peso rose for a third day as crude oil, the nation’s largest export, gained. Russian debt fell as people familiar with the deal said the government may raise about $7 billion in its sale of Eurobonds this week.
Technology stocks in the MSCI index rose 2% after software maker HCL said earnings jumped 72%, Apple reported a 90% profit gain and Japanese chipmaker Elpida Memory Inc. posted its first annual earnings in three years. Airline stocks including Air China Ltd. surged as flights in Europe resumed after six days of closures. Benchmark equity indexes in the Philippines, China and South Korea advanced at least l.7%.
Property rebound: China’s Shanghai Composite Index added 1.8% on Wednesday, its the first gain in five days. Reuters
“Within equities, we prefer technology and the cyclical sectors of the market,” Nader Naeimi, a strategist who helps oversee about $90 billion for AMP Capital Investors Ltd. in Sydney, said in an interview on Bloomberg Television. “From a regional point of view, we prefer Asia.”
Technology shares posted the biggest gains in emerging markets in the past month as companies kicked off the first- quarter earnings reporting season. The MSCI gauge has rallied 64% in the past 12 months as the global economy recovered from its first recession since World War II.
HCL’s 8.3% advance helped lift the Bombay Stock Exchange Sensitive Index to a 0.1% gain, while Russia’s Micex Index fell 0.6% as lower copper prices dragged down producers including OAO GMK Norilsk Nickel.
The extra yield investors demand to own Russian debt over US treasuries rose four basis points to 1.38 percentage points, according to JPMorgan Chase and Co.’s EMBI+ Index. The government may raise about $7 billion in its first sale of Eurobonds since 1998 after receiving at least $16 billion of orders from investors, according to three people familiar with the deal.
China’s Shanghai Composite Index added 1.8% for the first gain in five days. Property developers rebounded after investor Mark Mobius said demand for housing will withstand government lending curbs on banks. China Vanke Co., the nation’s largest developer, rose 1%.
South African government bonds rallied, reducing yields to their lowest in more than a year, as speculation increased that the central bank will lower its benchmark interest rate.
Investors should buy emerging market debt rather than bonds of developed countries because advanced economies are poised for a period of slower growth, according to Pacific Investment Management Co.
Tal Barak Harif in New York, Chua Kong Ho in Shanghai and Rajhkumar K Shaaw and Hemal Savai in Mumbai contributed to this story.