Emerging-Market Stocks Rise as Apple’s Earnings Spur Tech Rally

Apr 24, 2014 5:34 pm ET

April 24 (Bloomberg) -- Emerging-market stocks advanced for the first time in four days as technology companies surged to a record after better-than-estimated earnings at Apple Inc. Turkey’s lira led gains among the world’s major currencies.

The MSCI Emerging Markets Index rose 0.1 percent to 1,004.46, erasing an earlier decline. A measure of technology stocks climbed to the highest since at least 1995 as Samsung Electronics Co. jumped. The lira appreciated after Turkey’s central bank resisted government pressure to cut interest rates. Russia’s dollar-denominated RTS Index led losses in global equity gauges on concern the crisis in Ukraine will escalate.

Technology shares had the biggest gain among 10 groups in the gauge for developing-nation stocks after Apple, the world’s most valuable company, reported it sold more iPhones than anticipated and lifted its payout to shareholders. Emerging- market equities fell earlier as President Vladimir Putin warned Ukraine against continuing its anti-separatist offensive after government troops killed five rebels and prompted Russia’s military to begin new drills on the two nations’ border.

“The strength in the tech sector reflects some of the better-than-expected earnings reports we’ve been getting,” Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama, said by phone. “The situation in Ukraine scared some money out earlier, but it wasn’t enough to keep the selling all day long.”

Samsung Rallies

A measure of technology companies in the MSCI Emerging Markets Index advanced for a third day. Samsung, the world’s biggest maker of smartphones, jumped 1.3 percent in Seoul.

Brazil’s Ibovespa advanced the most in a week as Banco Bradesco SA climbed after its quarterly profit exceeded analysts’ estimates.

Russia’s Micex gauge extended a four-day slide to 4.1 percent as Gazprom sank 2.9 percent. The RTS posted the biggest decline among 93 stock indexes. Ukrainian Interior Ministry and army troops destroyed three road blocks as they fought pro- Russian separatists in the Donetsk region city of Slovyansk, the ministry said. Russia’s latest drills are a response to events in eastern Ukraine and involve warplanes near the border, Defense Minister Sergei Shoigu said, according to Interfax.

“I hope it doesn’t evolve into a full scale military conflict, but that’s not outside of the realm of possibility,” Malcolm Polley, the chief investment officer at Stewart Capital Advisors LLC in Indiana, Pennsylvania, said by phone. His firm manages $1.2 billion. “I don’t know that the U.S. or the developed world really wants to get entangled in a military conflict, so sanctions are the only logical alternative.”

The lira rose the most in almost three weeks as Turkey’s central bank kept the benchmark repurchase rate at 10 percent, in line with estimates in a Bloomberg survey of economists.

China’s stocks slid to a three-week low, led by technology and small-company shares, on concern new equity sales will divert funds. The yuan fell to the lowest level in 16 months.