Emerging-Market Stocks Advance as Ibovespa Erases 2014 Decline

Apr 02, 2014 5:45 pm ET

April 2 (Bloomberg) -- Emerging-market stocks rose for a ninth day after reports showing an increase in U.S. payrolls and factory orders added to confidence the global economy is recovering. Brazil’s Ibovespa erased this year’s drop.

The MSCI Emerging Markets Index added 0.4 percent to 1,004.97, the longest rally in 15 months. The Ibovespa jumped as Centrais Eletricas Brasileiras SA led power utilities higher. Poly Real Estate Group Co. surged 7 percent, pacing gains in Chinese stocks, on speculation the government will relax housing curbs. Russia’s Micex Index snapped a three-day advance after U.S. lawmakers passed a bill authorizing further sanctions.

Equities gained after a private report showed American companies boosted payrolls in March by the most in three months, adding to evidence the job market is recovering, while growth in factory orders beat economists’ estimates. The U.S. House yesterday approved a range of sanctions against Russian officials deemed responsible for corruption and violence, sparking concern the crisis in Ukraine will escalate.

“We’re seeing that the economy is recovering,” Eric Teal, who helps oversee about $3.5 billion as the chief investment officer at First Citizens BancShares Inc. in Raleigh, North Carolina, said by phone. “Still, uncertainty on the geopolitical risk with Russia continues to be an overhang for the emerging markets.”

The iShares MSCI Emerging Markets Index exchange-traded fund advanced 0.2 percent to $41.57. The premium investors demand to own emerging-market debt over U.S. Treasuries slipped 0.03 percentage point to 288 basis points, according to JPMorgan Chase & Co.

Brazil, Russia

Brazil’s Ibovespa rose to the highest level since Nov. 29 as Centrais Eletricas Brasileiras surged 4.4 percent. State-run companies have gained recently on speculation that President Dilma Rousseff’s re-election in the October ballot may be at risk as polls show a decline in her approval rating, said Pedro Galdi, the chief analyst at brokerage firm SLW Corretora.

Russia’s ruble weakened the most in a month and stocks retreated, while the government sold fewer bonds than offered at its first auction in five weeks. Russia will resume buying foreign exchange in days for the Reserve Fund, Finance Minister Anton Siluanov said in Moscow today.

The Shanghai Composite Index rose 0.6 percent as a gauge of real-estate shares jumped to a six-week high after the Shanghai Securities News said some Chinese cities are discussing easing curbs on home purchases.

India’s benchmark stock index rose to a record for a sixth day as international investors extended Asia’s largest equity- market inflows. Bharti Airtel Ltd. rallied to the highest since Jan. 15 amid a report that the nation’s largest carrier plans a $2 billion bond sale to lower debt costs. Wockhardt Ltd. surged by the daily limit amid speculation the U.S. regulator may ease an import ban on Indian drugs.