BLBG:Emerging Stocks Rally With Currencies as Metals Advance
Emerging-market stocks rose for the first time in seven days and currencies from India’s rupee to the Turkish lira rebounded. Metals gained while European stocks and U.S. equity-index futures were little changed.
The MSCI Emerging Markets Index climbed 0.7 percent to 929.09 at 10:45 a.m. in London, trimming this week’s decline to 3 percent. The Stoxx Europe 600 Index slipped less than 0.1 percent and Standard & Poor’s 500 Index futures fell 0.1 percent. The rupee and the lira rallied from record lows. The yen weakened on speculation Bank of Japan Governor Haruhiko Kuroda will reiterate the case for monetary easing at the Federal Reserve’s annual conference in Jackson Hole, Wyoming. Copper advanced 0.5 percent.
Fed Bank of Dallas President Richard Fisher said yesterday the U.S. economy is strong enough to slow the pace of stimulus, while European Central Bank Governing Council member Ewald Nowotny said good economic news removed the need for further interest-rate cuts. Countries from India to Indonesia signaled they will take steps to support financial markets and Brazil announced a $60 billion intervention program involving currency swaps and loans.
“Emerging markets should remain very volatile for the remainder of this year as governments try to restore investor confidence and stem capital outflows,” Vana Bulbon, chief executive officer at UOB Asset Management (Thailand) Co. Ltd., which manages about $6.4 billion, said in Bangkok. “The global outlook has been improving led by growth in the U.S, while economies in Europe and China have bottomed out.”
Worst Week
The MSCI gauge of shares from 21 developing countries rebounded as its worst week in two months drove shares to a six-week low. About $1.5 trillion has been erased from the value of emerging-market equities since Fed Chairman Ben S. Bernanke said on May 22 policy makers could scale back bond buying.
Benchmark equity gauges in India and South Korea gained more than 1 percent. The rupee and the lira both climbed 0.6 percent against the dollar. The Thai baht advanced 0.4 percent and the Malaysian ringgit strengthened 0.3 percent, rebounding from three-year lows.
The Stoxx 600 has fallen 0.9 percent this week, the most since June. A gauge of personal and household goods companies posted the largest retreat of the 19 industry groups in the index as L’Oreal SA and LVMH Moet Hennessy Louis Vuitton SA both dropped at least 1.3 percent.
Afren Plc slipped 5.8 percent after the oil explorer reported that its profit after tax decreased 39 percent to $62 million in the first half.
Home Sales
S&P 500 futures slipped before a report that may show sales of new houses in the world’s largest economy fell last month. The Commerce Department release, due at 10 a.m. in Washington, will show that Americans bought 487,000 new residential properties at an annual rate in July, compared with 497,000 in June, according to the median estimate of economists surveyed by Bloomberg.
Japan’s currency weakened 0.2 percent to 98.91 per dollar and 0.3 percent per euro. The 17-nation common currency was little changed at $1.3368. South Africa’s rand rose against all of its 16 major peers, climbing most against the Canadian dollar.
The pound added 0.2 percent to $1.5618 after a report showed U.K. gross domestic product increased 0.7 percent in the second quarter, exceeding an initial estimate of 0.6 percent.
The yield on 10-year German bunds rose three basis points to 1.95 percent. Treasuries were little changed, with the 10-year yield at 2.89 percent, up six basis points in the week.
The cost of insuring against losses on corporate bonds fell, with the Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade companies decreasing 0.8 basis point to 101.9 basis points, the lowest since Aug. 16.
Nickel climbed 1 percent and lead advanced 0.4 percent. West Texas Intermediate oil erased declines and was 0.2 percent higher at $105.23 a barrel. Corn advanced 0.7 percent.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Pratish Narayanan in Singapore at pnarayanan9@bloomberg.net;
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
