Seoul: Emerging-market stocks rose, extending a weekly gain, as a gauge of Chinese mainland shares traded in Hong Kong entered a bull market. Russian stocks and its currency slumped amid the threat of further sanctions.

China Coal Energy Co. climbed to its highest level in seven months after the nation’s industrial-profit growth accelerated.

Hyundai Steel Co. gained 5.3% in Seoul after profit beat analyst estimates. Rosneft OAO dropped 1.9%, while the ruble weakened 0.7%. Former majority owners of Yukos Oil Co. said they won a $50 billion award against Russia.

The MSCI emerging markets index climbed 0.1% to 1,080.10 at 10:41am in London, after jumping 1.5% last week. The Hang Seng China enterprises index has risen more than 20% from this year’s low as government stimulus boosts investor confidence in the world’s second-largest economy.

The European Union may impose its strongest sanctions yet over Russia’s involvement in Ukraine, including a ban on European purchases of bonds or shares sold by Russian state-owned banks.

“We’re likely to see more upside in emerging markets this year on increased economic stimulus in China and greater demand for the nation’s equities," Yun Hang Jin, an emerging-market analyst at Korea Investment & Securities Co., said from Seoul.

The developing-nation gauge has advanced 7.7% this year and trades at 11 times projected 12-month earnings, according to data compiled by Bloomberg. The MSCI world index has gained 5.3% and is valued at a multiple of 15.

China Coal Energy rose 5.2%. Yanzhou Coal Mining Co. rallied 2.9%. Chinese industrial companies reported a 17.9% gain in earnings in June from a year earlier, the fastest pace since September.

China stimulus

The Shanghai composite index added 2.4% to its highest level since 13 December. China has cut reserve requirements for some banks, accelerated infrastructure spending and loosened property curbs as Premier Li Keqiang seeks to keep growth from falling below his 7.5% target.

Financial companies surged in Hong Kong and the mainland after a Reuters report that Bank of Communications Co. applied for a mixed-ownership trial and an agreement by Shenyin & Wanguo Securities Co. to acquire Hong Yuan Securities Co..

Industrial & Commercial Bank of China Ltd, the nation’s biggest lender by market value, rose 1.5% in Hong Kong after saying it plans to raise as much as 80 billion yuan ($12.9 billion) selling preferred stock in China and offshore.

Russia’s Micex lost 1.5% as Rosneft headed for its lowest close in a year. “The Permanent Court of Arbitration in The Hague ruled that Russia is liable to pay almost half of the $103 billion plus interest sought by Yukos’s former owners," Tim Osborne, head of GML Ltd, former holding company of Yukos, told reporters in London on Saturday.

Yukos assets

Vladimir Putin’s government dismantled Yukos from 2004-2007 after imposing $27 billion in tax charges. Most of its former assets were acquired in a series of forced auctions by state-run Rosneft, which is the world’s largest publicly traded oil company by output.

The ruble retreated for a third day, heading for the weakest level since 6 May.

South Korea’s Kospi index climbed 0.7% to its highest close since October. Hyundai Steel rallied the most in 10 months. Korea Electric Power Corp. gained 6.3%.

Vietnam’s benchmark gauge lost 1.8% after its valuation reached the highest since May 2011. India’s S&P BSE Sensex slid 0.6%, while the Philippine Stock Exchange Index retreated 0.6%. Bloomberg

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