By Berni Moestafa and Stephen Gunnion
Oct. 25 (Bloomberg) — Emerging-market stocks rose, with the benchmark index climbing to a five-week high as rising metal and oil prices boosted commodities producers and investors awaited the results of a European summit tomorrow.
The MSCI Emerging Markets Index gained for a third day, adding 1.1 percent to 959.64 at 12:02 p.m. in London, set for the highest level since Sept. 16. The Hang Seng China Enterprises Index of Chinese shares traded in Hong Kong advanced 1.5 percent. Thailand’s SET Index climbed 2.9 percent after the country’s holiday yesterday.
European leaders will hold a second summit in four days tomorrow to contain the region’s debt crisis. Stocks in emerging Europe moved between gains and losses as fiscal austerity in the euro area threatened to slow growth, hurting demand for Polish, Czech and Hungarian exports.
“Markets look disorientated at present, since euro-region sovereign debt negotiations will also have major influence on the 2012 economic outlook for central and eastern Europe,” Daniel Lenz, a Frankfurt-based analyst for emerging markets at DZ Bank AG, wrote in an e-mail to clients late yesterday.
The unemployment rate in Poland rose to 11.8 percent in September from 11.6 percent the previous month, a report today showed. A separate report yesterday showed Hungary’s economic- sentiment index slid for a sixth month to the lowest in almost two years.
Turkey’s benchmark share index gained 1.1 percent, led by banks, while Russia’s Micex fell from its highest in a month, sliding 0.3 percent. South Africa’s All Share Index gained 0.7 percent as gold increased for a third day, boosting mining companies including AngloGold Ashanti Ltd., Africa’s biggest producer of the metal.
The MSCI emerging-market gauge has fallen 17 percent this year, compared with a 5.2 percent drop in the MSCI World Index, as faster inflation in China, India and Brazil prompted policy makers to raise interest rates, curbing economic growth. Shares on the developing nations gauge trade at 10.6 times earnings, compared with a four-year average of 14.2 times, according to data compiled by Bloomberg.
Cnooc Ltd., China’s biggest offshore oil producer, climbed for a third day in Hong Kong, providing the biggest boost to MSCI’s emerging-market index. PTT Pcl, Thailand’s largest energy company, rallied 4.6 percent in Bangkok and its oil unit PTT Exploration & Production Pcl rose 2.6 percent.
Crude-oil futures advanced 2.9 percent to $93.90 a barrel in New York, bringing this year’s gain to 2.7 percent. A gauge of six metals traded in London, including copper and nickel, added 5.9 percent yesterday, the most since October 2008.
The BSE India Sensitive Index gained after the Reserve Bank of India signaled it’s nearing the end of its record cycle of rate increases, even as it raised the repurchase rate for a 13th time since the start of 2010.
Indian banks fell, with HDFC Bank Ltd. dropping 3.4 percent and State Bank of India, the nation’s largest lender, retreated 3.6 percent.
In Seoul, Honam Petrochemical Corp. declined 5.3 percent. HMC Investment Securities Co. and KTB Investment & Securities Co. reduced their share-price estimates, citing a reduced earnings outlook at the South Korean petrochemical company.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell seven basis points, 0.07 percentage point, to 397, according to JPMorgan Chase & Co.’s EMBI Global Index.
The Markit iTraxx SovX CEEMEA Index of eastern European, Middle East and Africa credit-default swaps was steady at 306.5, according to data provider CMA.
–With Assistance from Krystof Chamonikolas in Prague. Editors: Ana Monteiro, Linda Shen
To contact the reporters on this story: Berni Moestafa in Jakarta at email@example.com Stephen Gunnion in Johannesburg at firstname.lastname@example.org