Emerging stocks rebound from five-month low as tech shares rally
The MSCI Emerging Markets Index rebounded from a five-month low, as Naver Corp. led a rally in technology companies
Tokyo: Emerging-market stocks rose, with the benchmark gauge rebounding from a five-month low, as Naver Corp. led a rally in technology companies. Russia’s ruble, Hungary’s forint and the Turkish lira advanced.
The MSCI Emerging Markets Index climbed 0.7% to 923.2 at 10.47am in London, after Wednesday closing at the lowest level since 28 August. Korean online search company Naver jumped the most since October after posting profit that beat estimates. Taiwan Semiconductor Manufacturing Co. rallied after tumbling the most in six months on Wednesday. The ruble gained 0.5% versus the dollar, while the lira climbed 0.3%. The forint strengthened 0.6% against the euro.
Emerging-market assets are stabilizing after central banks from Turkey to India raised interest rates to halt declines in their currencies. An index of developing-nation currencies rose 0.8% in the past three days after dropping on 15 of the previous 16 days. The European Central Bank (ECB) and Bank of England (BOE) decide on monetary policy on Thursday, and monthly US employment data will be released on Friday.
“The biggest driver for emerging markets today has been just continued stabilization in EM FX,” Michael Wang, an emerging-markets strategist at Amiya Capital LLP in London, said by e-mail. “People don’t want to take a big view on EM FX or equities ahead of the ECB today or payrolls tomorrow.”
About $3 trillion has been erased from the value of equities worldwide this year amid a slowdown in China’s economy as the Federal Reserve cuts stimulus.
Oversold indicator
The MSCI emerging-markets index has fallen 7.9% this year and is valued at 9 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has lost 5.1% in 2014 and trades at a multiple of 14.1.
The 14-day relative strength index for the developing- nation measure slipped to 21 on Wednesday, the lowest since 25 June. A reading below 30 signals to some investors that a security is oversold.
Nine out of 10 industry groups in the emerging-markets gauge rose, led by technology and energy companies. Naver surged 7.3%. South Korea’s Kospi Index added 0.9% as Samsung Electronics Co. advanced 1.8%, its first gain in seven days. Taiwan Semiconductor, the world’s largest custom maker of chips, rose 1.5%, snapping a two-day slump. The nation’s Taiex Index climbed 0.6%.
A report tomorrow will probably show US businesses added 183,000 employees in January after a 74,000 increase in December, according to a survey of economists by Bloomberg. The BOE and ECB will both keep policy unchanged, separate surveys showed. HSBC Holdings Plc and Markit Economics report data on China’s services industry on Friday.
Turkey rally
The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose 0.7%, rebounding from its lowest level in six months. China’s markets are closed for holidays until Friday.
The Borsa Istanbul 100 Index jumped 1.7%, the most behind Finland among 94 indexes monitored by Bloomberg. Poland’s WIG30 Index climbed 1.6%, the Prague Stock Exchange Index rose 1.4% and Egypt’s EGX30 added 1.3%.
Gedeon Richter Nyrt., Hungary’s largest drug maker, fell 6.1%, the most since 11 February 2013, after lower revenue guidance prompted Jefferies Group LLC and UBS AG to downgrade the stock.
The lira advanced 0.7% to 2.2223 per dollar. That brings its gain since 24 January, the day before the central bank announced an emergency rates meeting, to 5.2%, the most among more than 170 currencies tracked by Bloomberg.
Forint, peso
The ruble gained for a third day, adding 0.5%, the longest winning streak since December, and trimming its decline this year to 5.3%.
The forint strengthened 0.7% to 307.24 per euro. The Philippines peso advanced for a third day after it held its benchmark interest rate at a record low for a 10th straight meeting to boost economic growth, even as inflation accelerates.
Dubai’s DFM General Index jumped 1.5%, touching the highest level since 2008. Emaar Properties PJSC, the builder of the world’s tallest tower, surged 4.7% after the company obtained its first investment grade rating in four years from Standard & Poor’s.
Gauges in Thailand, Malaysia and Indonesia climbed at least 0.7%. The S&P BSE Sensex of Indian shares gained 0.3% led by cigarettes-to-greetings cards conglomerate ITC Ltd.
The premium investors demand to own emerging-market debt over U.S. Treasuries fell two basis points to 347 basis points, according to JPMorgan Chase & Co. indexes. Bloomberg
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