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Emerging-market stocks rise

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Emerging-market stocks rose a third day amid bets China and South Korea will take steps to support growth. The Ibovespa sank as Brazilian presidential candidate Eduardo Campos was killed in a plane crash.

The Shanghai Composite Index erased losses as investors weighed prospects for stimulus after disappointing economic data and the Kospi Index jumped 1 per cent in Seoul. OAO Gazprom and OAO Lukoil led a rally in Russia as the lowest valuations among emerging markets attracted investors. The Ibovespa fell as much as 2.1 per cent.

Bloomberg News reported that the MSCI Emerging Markets Index added 0.6 per cent to 1,070.64 at 2:55 p.m. in New York. China’s broadest measure of new credit unexpectedly plunged to the lowest level since the global financial crisis.

The data spurred speculation that the government will increase stimulus in the world’s second-largest economy, with Premier Li Keqiang’s growth target of about 7.5 per cent this year at risk.

“Investors are getting more confident on China,” Hertta Alava, head of emerging markets at FIM Asset Management Ltd. in Helsinki, said by e-mail. “Today’s economic numbers were slightly weaker, but nothing alarming, and targeted stimulus should keep growth at a relatively good level.”

The developing-nation gauge has risen 6.8 per cent this year and trades at 11.2 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has gained 2.8 per cent in the period, and is valued at a multiple of 14.7.

The Micex Index rallied 1.8 per cent as energy stocks Lukoil and Gazprom rose more than 1.1 per cent each. The gauge last traded at 5 times estimated earnings, compared with a multiple of 5.3 before Russia’s incursion into Ukraine’s Crimea peninsula.

Article Credit: Punchng

Updated 4 Years ago

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Tags:     OAO Gazprom     OAO Lukoil     Premier Li Keqiang     Hertta Alava