BS: Emerging Stocks Rebound as Russian Shares Rally; Dubai Plunges
Emerging-market stocks rebounded from a two-week low as Russian President Vladimir Putin asked lawmakers to rescind approval to use force in Ukraine. Dubai shares plunged the most in 10 months.
The MSCI Emerging Markets Index added 0.6 percent to 1,048.28 at 12:12 p.m. in London, after yesterday closing at the lowest level since June 5. OAO Gazprom jumped 2.6 percent to the highest in four months, pushing the Micex (INDEXCF) Index up 1.3 percent. Arabtec Holding Co. slumped 9.8 percent, dragging Dubai shares down as much as 8.7 percent. Housing Development Finance Corp. led a 1.4 percent gain in Indian equities.
Putin’s call comes after Pro-Russian rebels in eastern Ukraine called a cease-fire in fighting against government forces, matching a truce announced three days earlier by President Petro Poroshenko. Brent crude traded near a four-day low amid speculation that Iraqi oil production won’t be disrupted by violence in OPEC’s second-largest producer.
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“Today is a reasonable day, recovering a bit from losses yesterday,” Maarten-Jan Bakkum, an emerging-markets strategist at ING Investment Management Co. in The Hague, said by e-mail. “The news of the cease-fire is positive for Russia and Poland.”
The Micex gained the most since June 2, while the ruble climbed 0.8 percent versus the central bank’s dollar-euro basket on optimism the rebel cease-fire in Ukraine will ease a crisis that’s left hundreds dead in the former Soviet republic. Putin asked the upper house of parliament to cancel approval granted March 1 to use force in Ukraine, Kremlin spokesman Dmitry Peskov says by phone today, confirming an Interfax report.
Dubai Slump
Ukrainian dollar bonds due in 2023 advanced for the first time in three days, pushing yields down by 23 basis points to 8.89 percent, according to data compiled by Bloomberg.
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Dubai’s DFM General Index, which entered a bear market yesterday after it fell 20 percent from a peak in May, tumbled 6.7 percent at the close, its third day of losses.
Arabtec plunged to the lowest level since January after the United Arab Emirates’ largest listed construction company said it dismissed a “limited” number of staff. The builder denied reports that hundreds of employees have been fired, according to statement posted on Dubai’s stock market website today.
The lira strengthened 0.4 percent for a third day of gains, while Turkish equities advanced 0.7 percent. The nation’s central bank lowered the benchmark repurchase rate by 75 basis points to 8.75 percent, a bigger cut than expected.
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Energy Costs
All 10 industry groups in the MSCI Emerging Markets Index rose, led by consumer-discretionary and utility stocks. Samsung Electronics Co., with a 4 percent weighting in the index, advanced 1.7 percent in Seoul.
The developing nations measure has risen 4.5 percent this year and trades at 11 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has gained 5.1 percent this year and is valued at a multiple of 15.2.
Brent crude was little changed at $114.18 per barrel following yesterday’s 0.6 percent decline as Iraq’s army recaptured territory along the border with Jordan and Syria from militants. It reached $115.71 on June 19, the highest level since Sept. 9.
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India’s S&P BSE Sensex (SENSEX) index halted a four-day drop and the rupee rose 0.2 percent. Housing Development Finance, which has a 6.9 percent weighting in the index, added 2.6 percent. Gail India Ltd. (GAIL), which processes and distributes natural gas, was the biggest percentage gainer, rising 4.6 percent. Lower fuel costs may ease inflation in India, which buys about 80 percent of its crude from abroad.
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed on Hong Kong added 0.5 percent after a 1.9 percent slump yesterday. Bank of China Ltd. rose 1.2 percent, halting a four-day loss. Stocks sank yesterday amid concern that Chinese property prices will continue to fall amid higher money-market rates and political tension between the city and the mainland. - -With assistance from Elffie Chew in Kuala Lumpur and Lilian Karunungan in Singapore.
To contact the reporters on this story: Choong En Han in Kuala Lumpur at echoong6@bloomberg.net; Natasha Doff in London at ndoff@bloomberg.net
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To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net; Daliah Merzaban at dmerzaban@bloomberg.net Matthew Brown, Daliah Merzaban
