Emerging stocks head to 2 month high
Emerging-market stocks climb toward a two-month high as data shows China’s economy expanded more than economists forecast.
|||Shanghai - Emerging-market stocks climbed toward a two-month high as health-care shares surged and data showed China’s economy expanded more than economists forecast. South Korea’s won rose to the strongest level in three months, while Russia’s ruble retreated.
Sino Biopharmaceutical advanced to a record in Hong Kong. The Hang Seng China Enterprises Index increased to the highest level since August 18. Reliance Industries, operator of the world’s largest oil-refining complex, surged 4.7 percent in Mumbai after its earnings beat estimates. Turkish equities jumped 1.6 percent. The won added 0.7 percent versus the dollar, while Malaysia’s ringgit slid 0.7 percent. The ruble halted a three-day gain after oil dropped.
The MSCI Emerging Markets Index gained 0.3 percent to 867.65 at 9:11 a.m. in London, its third day of gains. China’s gross domestic product rose 6.9 percent in the third quarter from a year earlier, topping economists’ estimates for 6.8 percent. Still, that was the slowest quarterly expansion since the first three months of 2009 and less than the government’s target of 7 percent for this year.
“Although China’s growth data came ahead of estimates, investors are still expecting a continuing downtrend in its economy,” said Jeffrosenberg Tan, portfolio manager at Jakarta- based PT Sinarmas Asset Management. The data may also affect the Federal Reserve’s decision on the timing of interest-rate increases, he said, adding that he has raised his holdings in stocks and will buy “selectively” in any market corrections.
Equity valuations
The developing-stocks gauge has fallen 9.3 percent this year and trades at 11.4 times its 12-month estimated earnings, data compiled by Bloomberg show. The MSCI World Index has dropped 1.5 percent in 2015 and is valued at a multiple of 15.7 times.
Seven out of 10 industry groups in the emerging-markets measure rose, led by health-care and energy stocks. Sino Biopharmaceutical rallied 4 percent after the stock was cited by China International Capital as top picks in mainland shares traded in Hong Kong. The Hang Seng China Enterprises gauge gained 0.5 percent.
The Shanghai Composite slid 0.1 percent after it earlier climbed as much as 1 percent. The benchmark index surged 6.5 percent last week for the steepest weekly gain in four months as traders speculated the government will accelerate reforms of state-owned companies and loosen monetary policy to bolster the economy.
Reliance rallies
Indian stocks advanced 0.5 percent as Reliance Industries gained the most in four months. PT Astra International rose 2.4 percent to lead a 1 percent increase in Indonesian equities. Largan Precision sank 5.2 percent to a nine-month low after brokerages including Jih Sun Securities cut their price targets for the Taiwanese stock.
The won strengthened for a fourth day. The ringgit weakened for a second day ahead of the budget later this week as investors focus on what measures the government will take to shore up the economy amid a collapse in commodities and slowing global growth.
Turkish stocks headed for the highest close since July 31, paced by a 2 percent increase in Turkiye Garanti Bankasi, the nation’s biggest lender.
Uralkali PJSC slid 4.9 percent in Moscow. MSCI said on Friday it’ll remove the company’s common shares from its global indexes effective October 21 following the stock’s share buyback. Russian equities lost 0.3 percent and the ruble weakened 0.4 percent after Brent crude declined 1 percent.
Gold Fields and AngloGold Ashanti dropped at least 3.5 percent in Johannesburg after bullion retreated from a three-month high.
BLOOMBERG