London: Emerging market stocks rallied the most in a month and commodities gained, following China’s better-than-expected growth in exports and Egypt’s plan to hand power to a democratically-elected government.
The MSCI Emerging Markets Index advanced 1.3% at 9.41am in New York after the Shanghai Composite Index closed up 2.5%. The Stoxx Europe 600 Index added 0.4%, while the Standard and Poor’s 500 Index drifted between gains and losses. Wheat climbed as much as 1.8% and copper topped $10,000 per tonne. The euro depreciated against its 16 major peers and the Spanish 10-year bond yield rose four basis points.
The advance in the Shanghai Composite was its biggest of the year after China’s exports jumped 38% in January. Egypt’s ruling army council said it aims to transfer power within six months after almost three weeks of unrest ended the 30-year rule of president Hosni Mubarak.
The global recovery based on consumption is now better placed to continue on its trajectory, said Vishnu Varathan, a Singapore-based economist at Capital Economics Asia Pte.
The MSCI gauge of 21 emerging markets recovered more than one-third of last week’s 3.4% drop that left the index trading at 13.8 times earnings, the lowest level since August, data compiled by Bloomberg show.
The S&P 500 slipped after closing last week at the highest level since June 2008 and a valuation of about 15.9 times its companies reported operating earnings, the most-expensive in almost eight months.
Three stocks gained for every one fell in Europe’s Stoxx 600. John Wood Group Plc rallied 14 percent after General Electric Co. agreed to buy its well-support division for about $2.8 billion. The MSCI Asia Pacific Index added 1.5%, with Japan’s Topix index advancing for a sixth day as the country’s gross domestic product shrank less than expected.
Egypt’s stock exchange has been closed since the end of trading on 27 January. Trading, which was due to reopen on 16 February, may now start 20 February, according to the bourse. The government’s dollar bonds and credit-default swaps were little changed today.
Wheat futures surged to $9.15 a bushel on the Chicago Board of Trade, the highest price since 22 August, 2008. Egypt is the world’s biggest wheat importer. Copper jumped 1.5% on increased imports in China, the world’s largest buyer of industrial metals.
The euro depreciated 0.9% versus the dollar and 0.8% against the yen.
Claudia Carpenter, David Merritt, Abigail Moses, Michael Patterson, Daniel Tilles and Steve Voss contributed to this story.