Emerging stocks rise to 3-year high as consumer firms climb
The emerging-market gauge has increased 8% this year and is valued at 11.2 times projected 12-month earnings, the most expensive since April 2011
Jakarta: Emerging-market stocks gained for a seventh day, led by consumer discretionary and technology companies, as confidence in the US housing industry climbed and global political tensions eased.
South Korea’s Lotte Confectionery Co. jumped to a record. Clevo Co. added the most in almost five months, leading an advance in technology shares after the Nasdaq 100 Index climbed to a 14-year high on Monday. OAO Moscow Exchange rose to near a six-week high as the Micex Index advanced for an eighth day.
The MSCI Emerging Markets Index increased 0.6% to 1,083.18 at 3:33 pm Hong Kong time, heading for the highest close since August 2011. A measure of US homebuilder sentiment on Monday showed confidence rose in August to the highest level in seven months. The International Red Cross 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.
The US data is seen as a signal that the US economy is on track towards recovery, Priyo Santoso, chief investment officer at PT Mandiri Manajemen Investasi, said by phone on Tuesday. The market is also being driven by easing geopolitical tension, particularly in Ukraine.
Market valuation
Lotte Confectionery surged 8.5% in Seoul, the biggest percentage gainer in the emerging index, as Samsung Securities Co. raised its target price to 2.43 million won from 2.1 million won, citing improvements from overseas operations.
The developing-market gauge has increased 8% this year and is valued at 11.2 times projected 12-month earnings, the most expensive since April 2011, according to data compiled by Bloomberg. The MSCI World Index has gained 4.1% in 2014 and trades at a multiple of 14.9.
ScinoPharm Taiwan Ltd. rose 7% in Taipei, ending a five-day, 18% slump that pushed its 14-day relative strength index to 14.2. A reading below 30 is seen by some investors as a signal that a security is set to rebound. Eclat Textile Co. also climbed 7% after falling 26% in five days through on Monday. Taiwan’s benchmark Taiex index added 1.1%, its largest advance since 22 May.
Nine out of 10 industry groups in the emerging-market measure rose, led by 0.7% advance in a gauge of consumer discretionary and technology companies. Clevo jumped 6%, the most since 21 March. Taiwan Semiconductor Manufacturing Co. gained 1.2%.
The Micex Index rose 0.5%, heading for the highest close since 17 July. Moscow Exchange advanced 2.6%, the biggest gainer in Russia’s benchmark gauge. Turkey’s Borsa Istanbul 100 Index rose 0.9%.
Equity indexes in South Korea and Philippine added at least 0.8%. India’s S&P BSE Sensex Index gained 0.3%, while the Jakarta Composite index and Thailand’s SET Index climbed 0.2%. The ringgit, rupiah and India’s rupee all strengthened 0.1% against the dollar. Russia’s ruble fell 0.2%. BLOOMBERG
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