Emerging-Market Stocks Climb for First Day in Three on Bets Fed Will Ease

Bloomberg.com   |  October 11 2010 11:09 EDT

Emerging-market stocks rose, sending the benchmark index higher for the first time in three days, as investors speculated the Federal Reserve will take more steps to stimulate growth.

The MSCI Emerging Markets Index added 0.7 percent to 1,108.47 at 10:32 a.m. New York time. China’s Shanghai Composite Index increased 2.5 percent, bringing its two-day climb to 5.7 percent, the biggest in a year. Thailand’s SET stock index rose 1.5 percent, its largest advance in three weeks. Turkish stocks reached an all-time high and bond yields fell to the lowest on record after the government pledged to cut its deficit. Brazil’s Bovespa stock index climbed 0.4 percent and Russia’s Micex stock index gained 1.1 percent.

PetroChina Co. and China Shenhua Energy Co. climbed at least 3 percent after oil rose earlier today as much as 1 percent. Russia’s OAO GMK Norilsk Nickel, the world’s largest supplier of the metal, added 1.1 percent as most metals rallied.

“I think emerging-equity markets will outperform,” as a result of so-called quantitative easing, Bob Parker, senior adviser at Credit Suisse Group AG, told Francine Lacqua on Bloomberg Television’s “On the Move.” Equity traders are betting that the Fed and other central banks will undertake large-scale purchases of securities, he said.

The Fed will buy as much as $65 billion in Treasuries a month as it attempts to stem job losses, Mansoor Mohi-uddin, head of global currency strategy at UBS AG, wrote in a report today. The U.S. lost more jobs than forecast in September while the unemployment rate remained unchanged at 9.6 percent, the Labor Department said Oct. 8.

Turkish Records

Turkey’s ISE 100 index jumped 2.7 percent after the government said it would cut its deficit to 2.8 percent of gross domestic output in 2011, according to details published yesterday in the Official Gazette. The previous target was 4 percent. Turkiye Garanti Bankasi AS, Turkey’s biggest bank by market capitalization and the heaviest weighted stock in the Turkish index, surged 4.7 percent.

Yields on Turkey’s benchmark two-year bonds declined 12 basis points to 7.72 percent, according to an ABN Amro Holding NV index, the lowest closing level since the index started in October 2004. The lira appreciated to its strongest level in two years, strengthening 0.2 percent against the dollar to 1.4125.

OAO Rosneft, Russia’s biggest oil producer, rose 2.3 percent in Moscow. The country’s government may extend tax breaks for state-run Rosneft at the Vankor field, Russia’s largest new oil development, Finance Minister Alexei Kudrin told reporters this weekend in Washington. The savings may amount to $4 billion a year, Artem Konchin, an oil and gas analyst at UniCredit SpA in Moscow, said today by telephone.

OGX Petroleo & Gas Participacoes SA, the oil company controlled by Brazilian billionaire Eike Batista, rose for the first time in three days after UBS AG recommended buying the stock.

To contact the reporter for this story: Jason Webb