Emerging-market stocks climbed for a fourth day as President Vladimir Putin said Russia will do all it can to end the Ukraine conflict, spurring speculation tension will ease. The ruble and South Korean won advanced.
OAO Mobile TeleSystems, Russia’s biggest mobile-phone operator, rallied for a sixth day, leading the Micex Index to a three-week high. LPP SA jumped the most since 2007 after MSCI Inc. said it was adding Poland’s biggest clothes retailer to its developing-nation gauge. The ruble (CME:R6U14) strengthened 0.3% against the dollar (NYBOT:DXU14). South Korea’s won rose the most in four months after the central bank cut interest rates.
The MSCI Emerging Markets Index rose 0.1% to 1,072.01 at 1:45 p.m. in London, bringing its four-day increase to 2.5%. Russia shouldn’t isolate itself from the outside world and will do all that is possible to end the conflict in Ukraine, Putin said near Yalta in Crimea today. Applications for unemployment benefits in the U.S. rose more than forecast last week, a Labor Department report showed today.
“Putin’s speech reassured investors,” Vladimir Miklashevsky, a strategist at Danske Bank A/S in Helsinki, said by e-mail today. “This gives hope that markets won’t see an escalation in the geopolitical situation.”
A Bloomberg gauge tracking 20 developing-nation currencies rose 0.3% in its second day of gains. The premium investors demand to own emerging-market debt over U.S. Treasuries narrowed one basis point to 288, according to JPMorgan Chase & Co. indexes.
All but one of the 10 industry groups in the MSCI Emerging Markets Index climbed, led by health care and telecommunications companies. Mobile TeleSystems jumped 2.3% in Moscow to the strongest level since July 17.
The Micex increased 0.3% in Moscow, taking its five-day advance to 5.2%, the longest stretch of gains since the six days ended May 14. The ruble strengthened to 35.9095 per dollar and the yield on 10-year Russian government bonds declined eight basis points to 9.32%. The rate has fallen 58 basis points in four days, set for the biggest weekly decrease since January 2010.
Putin, who is facing increasingly stiff economic sanctions from the U.S. and the European Union, addressed political leaders in Yalta today. His comment is “the key driving factor for Russian markets, which have outperformed today,” Neil Shearing, the chief emerging-market economist at Capital Economics Ltd., said by phone from London.
Ukraine opened the door to a compromise over a humanitarian aid convoy from Russia, saying it would accept assistance, destined for the war-torn eastern regions, if the Red Cross distributes the aid after customs and border officers examine it.
The Ukrainian Equities Index advanced 0.9%, while the yield on the government’s Eurobonds due in July 2017 fell 12 basis points to 10.18%. Stocks in Abu Dhabi and Egypt climbed at least 1%. The S&P BSE Sensex Index climbed 0.7% after wholesale inflation data came in line with estimates.
LPP soared 10% in Warsaw after the MSCI said in a quarterly review it was adding the stock to the MSCI Emerging Markets Index.
The gauge has risen 6.9% this year and trades at 11.2 times 12-month projected earnings, data compiled by Bloomberg show. The MSCI World Index has increased 3.1% and is valued at a multiple of 14.8.
A measure of Hong Kong-traded Chinese shares retreated 1.1% from an eight-month high. The Shanghai Composite Index lost 0.7%. Tencent Holdings Ltd., Asia’s biggest Internet company, sank 2.3% in Hong Kong after saying it expects growth in mobile-game revenue to plateau. The stock was cut to neutral by analysts at HSBC Holdings Plc, who cited the games forecast.
The won strengthened 0.8% after the Bank of Korea cut its seven-day repurchase rate to 2.25% from 2.5% to revive economic growth.