Risk back on

Emerging stocks soar

Emerging-market stocks headed for the biggest weekly jump since March on speculation China will take steps to support the economy and as Russia pledged to de-escalate the conflict in Ukraine. Malaysia’s ringgit rose.

OAO Lukoil climbed for a fifth day in Moscow as the Micex Index was set for its best week since March. Katmerciler Arac Ustu Ekipman Sanayi ve Ticaret AS surged 14 percent in Istanbul after the riot truckmaker swung to a profit. China Mobile Ltd. added the most since 2009 after saying it will cut device subsidies. The Shanghai Composite Index had its longest weekly winning streak in 14 months. The ringgit rose 0.8 percent.

The MSCI Emerging Markets Index advanced 0.2 percent to 1,074.81 at 1:53 p.m. in London, taking this week’s increase to 2.8 percent. Chinese data showed inflation was subdued last month, while weaker-than-estimated credit growth and industrial production boosted speculation the government will ease monetary policy. Russia proposed a cease-fire to allow humanitarian aid deliveries to eastern Ukraine.

“Russia has been strong this week, as investors think that the conflict in Ukraine can de-escalate,” Maarten-Jan Bakkum, an emerging-market strategist at ING Groep NV in The Hague, said by e-mail. “In China, we had some weak data earlier this week, but the market took it well.”

The U.S. will report producer prices and manufacturing data today after posting worse-than-forecast jobless claims and retail-sales data.

Weekly Gains

A Bloomberg gauge tracking 20 emerging-market currencies climbed 0.5 percent this week, matching the advance in the five days through June 27. The premium investors demand to own developing-country debt over U.S. Treasuries was little changed at 286, according to JPMorgan Chase & Co. indexes.

All but one of the 10 industry groups in the emerging- markets measure rose, led by telecommunications companies. China Mobile, the world’s largest carrier by users, jumped 5.8 percent. Credit Suisse Group AG and Barclays Plc boosted the stock’s ratings after the company said it will cut $2 billion from its device subsidies this year.

The Micex added 0.8 percent, bringing its increase this week to 5.3 percent, the most since the five days through March 21.

President Vladimir Putin pledged yesterday to work to halt the conflict in Ukraine in comments made during a visit to the Crimean peninsula that he annexed in March. The yield on 10-year local currency bonds declined eight basis points to 9.25 percent, extending the decrease this week to 65 basis points, the most since November 2009.

Russian Bonds

Bonds had retreated in the previous six weeks as the U.S. and European Union sanctions threaten to exacerbate the economy’s worst performance since the 2009 recession.

Ukrainian shares advanced 0.9 percent and government notes due in July 2017 capped the best week since May, with yields dropping 1.26 percentage points in the five days to 9.94 percent. The BUX Index in Hungary added 0.6 percent.

In Istanbul, Katmerciler, which makes anti-riot vehicles and water-cannon armed trucks, climbed the most since August 2011 on a closing basis as volume jumped to 9.3 times the three- month daily average. The company turned to a profit after boosting its focus on export markets from Sudan to Kurdistan.

The lira fell 0.5 percent against the dollar. The ringgit strengthened for a fifth day after data showed the nation’s economic growth unexpectedly accelerated to the fastest pace in six quarters.

China Policy

The developing-nation gauge has increased 7.2 percent this year and trades at 11.2 times projected 12-month earnings, data compiled by Bloomberg show. The multiple is 14.8 for the MSCI World Index, which climbed 3.5 percent in 2014.

The Shanghai Composite Index added 0.9 percent to an eight- month high. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong climbed 0.3 percent, bringing its weekly rally to 2.5 percent. China may adopt targeted interest- rate cuts for shanty-town redevelopment, the agriculture sector and small companies, according to a front-page commentary today in the China Securities Journal.

“China’s seriousness in boosting its economy has bolstered investors’ sentiment in emerging markets,” Chanpen Sirithanarattanakul, head of research at DBS Vickers Securities (Thailand) Co., said by phone in Bangkok.

Polish, Indian and South Korean markets are closed for holidays.

 
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