Emerging markets rally, is it jobs omen?

Emerging-market stocks rallied the most in two months after a better-than-estimated American jobless claims report bolstered confidence on global economic growth. Turkish shares drove gains in world equities.

The MSCI Emerging Markets Index climbed 1.5 percent to 929.93 at 12:40 p.m. in New York, snapping a three-day slump. The Borsa Istanbul 100 Index of stocks surged 3.4 percent, while the lira rallied as banks offered the highest rate on savings after a doubling of central bank rates last month. Brazil’s Ibovespa jumped 2.8 percent as Vale SA paced gains in commodity producers. Hong Kong stocks rebounded from the lowest level in six months as casino operators and energy producers rose.

Stocks advanced after a government report showed that applications for U.S. unemployment benefits fell for the first time in three weeks as employers retained workers to meet demand. European Central Bank President Mario Draghi said the ECB could take action to counter low inflation as soon as next month, when more data on the economy will be available.

The iShares MSCI Emerging Markets Index exchange-traded fund added 1.8 percent to $38.42. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, retreated 4.8 percent to 27.83.

The premium investors demand to own emerging-market debt over U.S. Treasuries fell six basis points, or 0.06 percentage point, to 342 basis points, according to JPMorgan Chase & Co.

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments
comments powered by Disqus