Emerging stocks advance to 16-month high as won boosts exporters

Jakarta: Emerging-market stocks rose, with the benchmark index poised for a 16-month high, as South Korean exporters were boosted by a weakening won and Indian stocks rallied after retail inflation slowed.

Samsung Electronics Co., the world’s biggest smartphone maker, jumped 2.6% in Seoul, heading for its steepest advance since 12 May. ZTE Corp. surged in Hong Kong after raising its first-half profit forecast. Indian stocks climbed for the first time in six days and the benchmark equities gauge in Turkey gained to a five-week high. The won weakened 0.9%, while Russia’s ruble declined for a fourth day.

The MSCI Emerging Markets Index added 0.2% to 1,065.50 at 3:23pm Hong Kong time, heading for the highest close since 8 March 2013. The won has slumped 1.5% this month, the largest decline among 24 emerging currencies tracked by Bloomberg, boosting earnings prospects for companies such as Samsung, which gets more than 80% of its revenue from outside Korea. The won has still gained 2.2% this year. Slowing inflation in India eases pressure on the country’s central bank to keep interest rates elevated.

South Korean stocks are leading gains as investor sentiment toward exporters is getting a boost from the stabilizing won, said Heo Pil Seok, chief executive officer at Seoul-based Midas International Asset Management Ltd, which oversees about $9.4 billion.

Technology stocks

The developing-market gauge has gained 6.3% this year and is valued at 11 times projected 12-month earnings. The MSCI World Index has advanced 5.2% and trades at a multiple of 15, according to data compiled by Bloomberg.

Six out of 10 industry gauges in the emerging-market index rose on Tuesday, led by technology and consumer discretionary companies. South Korea’s Kospi index rose 0.9%, led by Samsung. ZTE Corp jumped 7.7% in Hong Kong, bound for the steepest rise since July 2013. The company revised on Monday its first-half net income forecast to 1 billion yuan ($161 million) to 1.5 billion yuan, from 800 million to 1 billion yuan.

The Indonesian rupiah retreated for a third day after both candidates in last week’s presidential election said they won the vote, and amid signs the country’s current-account deficit widened to near a record.

The S&P BSE Sensex gained 0.4%, poised to end a five-day decline, after data showed on Monday that consumer prices rose in June by the least since January 2012. The Jakarta Composite Index rose 0.6%. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose 0.2%. The Malaysian stock exchange is closed for a public holiday on Tuesday.

Turkey stocks

The Shanghai Composite Index rose 0.2%, reversing an earlier decline, after data showed new bank lending exceeded estimates, outweighing concerns that new share sales might divert funds from existing equities.

China reports industrial production data on Wednesday. Output for the year through June may have expanded 8.8% from a year earlier, according to the median estimates of 12 economists surveyed by Bloomberg.

The Borsa Istanbul 100 Index advanced 0.4%, heading for highest close since 10 June, while the lira strengthened 0.2%. Russia’s Micex Index retreated 0.3%, extending Monday’s 1.1% loss, as the ruble rose 0.1%, reversing a three-day drop. The Dubai’s DFM General Index rose 1.3%, heading for a fourth day of gains and the highest close since 12 June. Bloomberg