BLBG:Emerging-Market Stocks Rise On Higher Oil, India’s Fuel Prices
Emerging-market stocks rebounded from a five-month low, as higher oil prices and India’s first fuel- price increase in seven months boosted energy shares, offsetting concern that economic growth in China and Europe is slowing.
PT Bumi Resources (BUMI) led gains in Asian energy companies after crude oil recovered from a seven-month low amid speculation the drop was exaggerated and China will accelerate efforts to spur growth. Indian Oil Corp., the biggest refiner, paced gains among its peers after raising gasoline prices. China Railway Group (390) jumped 4.1 percent in Hong Kong trading after the government said it will speed up building railways.
The MSCI Emerging Markets Index climbed 0.6 percent to 902.13 at 3:21 p.m. in Hong Kong. The gauge sank 2.4 percent yesterday, the most in six months, as concern deepened that Europe’s debt crisis will reduce developing-nation exports and curb demand for riskier assets. The BSE India Sensitive Index (SENSEX) gained 1.1 percent, while South Korea’s Kospi Index (KOSPI) added 0.3 percent. The Shanghai Composite Index dropped 0.5 percent after a private survey showed the nation’s manufacturing may shrink for a seventh month.
“It’s an opportunity” after the recent drop in developing-nation stocks, Geoffrey Dennis, global emerging- market strategist at Citigroup Inc. in New York, said in an interview on Bloomberg Television. “The market will go higher in the long term because the Chinese economy will get a lot better in the second half with policy easing.”
Chinese leaders vowed yesterday to intensify the “fine- tuning” of policies to bolster growth amid softening demand for its goods in Europe. Gasoline’s increase will cut losses at India’s state refiners, which sell some fuel below cost, after the rupee’s decline against the dollar countered a drop in crude oil prices.
The MSCI Emerging Markets Index (MXEF)’s 14-day relative strength index, which tracks momentum by comparing closing prices with daily trading ranges, was at 22.7 today. A reading of 30 or below is a signal some investors use to indicate prices may be about to rise.
To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
