Emerging-market stocks rose, extending a weekly gain, as a gauge of Chinese mainland shares traded in Hong Kong entered a bull market.
Russian shares and the ruble 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 percent in Seoul after earnings beat analyst estimates. Brazil’s Ibovespa extended last week’s advance. The ruble declined for a third day to the weakest since May and more than $80 billion has been erased from the value of Russian shares since a peak in June, as the benchmark gauge headed for a correction.
The MSCI Emerging Markets Index added 0.1 percent to 1,079.72 at 2:38 p.m. in London, after climbing 1.5 percent last week. The Hang Seng China Enterprises Index has risen more than 20 percent from this year’s low as government stimulus boosts investor confidence in the world’s second-largest economy. Satellite photos show Russia has shelled across the border into Ukraine, the U.S. said, while the European Union considers its strongest sanctions yet.
“The global environment is relatively supportive of emerging markets,” Lars Christensen, the chief emerging-markets analyst at Danske Bank A/S in Copenhagen, said by phone. “The geopolitical tensions have had a specific impact on Russia, but there hasn’t been widespread contagion.”
The developing-nation gauge has advanced 7.7 percent 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 percent and is valued at a multiple of 15.
The iShares MSCI Emerging Markets ETF advanced 0.2 percent.
The Shanghai Composite Index jumped 2.4 percent to its highest level since Dec. 13. 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 percent target.
Brazil’s Ibovespa gained 0.3 percent. Hypermarcas SA, a maker of consumer goods, climbed 2.2 percent after earnings best estimates.
Russia’s Micex lost 2.1 percent, extending declines from this year’s peak to more than 10 percent, the threshold for a correction. The ruble retreated 0.8 percent to the weakest level against the dollar since May.
Dutch, Australian and international investigators prepared to go to the crash site of Malaysian Air Flight 17 in eastern Ukraine, which the U.S. says was probably brought down by rebels using a Russian-supplied surface-to-air missile.
Former majority owners of Yukos Oil Co. said they won a $50 billion award against Russia. Russian President 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 OAO Rosneft, which is the world’s largest publicly traded oil company by output.
Rosneft dropped 2.1 percent and OAO Sberbank, the nation’s biggest lender, slid 3 percent.
Benchmark equity gauges in Poland, South Africa and Hungary advanced, shares in the Czech Republic declined. Markets in Turkey and the Middle East were closed for holidays.
Ukraine’s hryvnia weakened 2 percent against the dollar and the yield on the government’s July 2017 bond rose for a third day, increasing six basis points to a one-month high of 9 percent.
China Coal Energy rose 5.2 percent. Yanzhou Coal Mining Co. rallied 2.9 percent. Chinese industrial companies reported a 17.9 percent gain in earnings in June from a year earlier, the fastest pace since September.
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 2.3 percent 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.
South Korea’s Kospi index climbed 0.7 percent to its highest close since October. Hyundai Steel rallied the most in 10 months. Korea Electric Power Corp. gained 6.3 percent.
Vietnam’s benchmark gauge lost 1.8 percent after its valuation reached the highest since May 2011. India’s S&P BSE Sensex slid 0.5 percent, while the Philippine Stock Exchange Index retreated 0.6 percent.
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