Emerging-market stocks headed for the highest close in two weeks and most currencies strengthened on speculation China and the U.S. will maintain policies to support economic growth. Turkish shares rebounded.
Great Wall Motor Co. led Hong Kong-traded Chinese shares higher. Turkey’s equity gauge climbed 2.7% from a five-month low, leading global gains, while Russian and Indian equities advanced 0.6% and 1.5% respectively. Hungary’s forint (CME:WHZ14) appreciated at least 0.3%.
The MSCI Emerging Markets Index increased 1.2% to 1,011.14 at 1:59 p.m. in London. Chinese Premier Li Keqiang said yesterday the government will use “targeted measures” to support the economy. Minutes from the Federal Reserve’s last meeting showed officials are concerned that the global slowdown and a stronger dollar (NYBOT:DXZ14) pose risks to U.S. growth, spurring bets that interest rates will be kept low for longer.
“Yesterday’s Fed comments gave the market a bit of relief,” Leopold Quell, a co-fund manager at Raiffeisen Capital Management in Vienna who helps oversee €2 billion ($2.6 billion) in emerging market assets, said by e-mail. “The Chinese government or important officials make comments all the time. What is missing though, most of the time, is concrete action. So these comments I would take with a pinch of salt,” he said.
The emerging-markets gauge has risen 0.9% this year and trades at 10.9 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has advanced 0.9% in the period and is valued at a multiple of 14.6.
Li said yesterday the government will use “targeted measures” to tackle financing costs and support growth. China’s economy is in a “reasonable range,” even though “downward economic pressure” domestically and globally is big, he said.
A number of Federal Open Market Committee participants said U.S. expansion “might be slower than they expected if foreign economic growth came in weaker than anticipated,” according to minutes of their Sept. 16-17 meeting released yesterday.
All 10 industry groups in the MSCI Emerging Markets Index rose, led by health-care and telecommunications companies. The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong climbed 0.9%. South Africa’s Harmony Gold Mining Co. rallied 7.6% as bullion rose.
The Borsa Istanbul 100 Index jumped the most since March 28 after falling 1.9% yesterday. The government ordered a curfew for a second night across much of southeast Turkey, after deadly clashes sparked by Kurdish protests against the advance of Islamic State militants in neighboring Syria.
The Micex Index rose for the first time in three days. The ruble (CME:R6Z14) weakened 0.1% versus the dollar, the third day of declines. Russia’s central bank shifted the ruble’s trading band yesterday by the most since March 4 after the fourth intervention this month took the amount spent to defend the currency to $1.85 billion.
The FTSE/JSE Africa All-Share Index rallied 0.8%. AngloGold Ashanti Ltd. jumped 7.4% as bullion extended an advance to head for the longest increase since June.
The S&P (CME:SPZ14) BSE Sensex index climbed the most since Sept. 18. The Jakarta Composite Index gained 0.7%. South Korea’s market is shut for a holiday.
The ringgit appreciated 0.9%, ending a two-day slide. Malaysian Prime Minister Najib Razak will present the annual budget tomorrow, when he may give more details on a new consumption tax aimed at reducing the fiscal deficit.
The premium investors demand to own emerging-market debt over U.S. Treasuries narrowed one basis point to 308, JPMorgan Chase & Co. indexes show.
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