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London - Emerging-market stocks rose for the first time in four days and higher oil prices boosted currencies from commodity-exporting countries including Russia as OPEC officials gathered in Vienna.
Saudi Arabian stocks advanced for a third day, while equity indexes across emerging Europe gained. The ruble jumped for the first time since Monday, while South Korea’s won led currencies higher. Poland’s zloty retreated against the euro and Hungary’s forint gained against the euro ahead of a European Central Bank policy review on Thursday.
Turkish bonds gained, pushing yields to a four-week low.
Oil held steady near $49 a barrel, bolstering sentiment for emerging markets, especially for nations that rely on the commodity for revenue. OPEC ministers will discuss limiting production at today’s meeting. US employment figures due today and on Friday will help shape expectations for the timing of the Federal Reserve’s next interest rate increase.
“Oil prices are a bit higher and that’s a positive for all the commodity currencies,” said Anders Svendsen, an emerging-markets analyst at Nordea Bank AB in Copenhagen, who recommends buying the Hungarian forint and Mexican peso.
“People are gradually building up hopes for the payrolls report on Friday and that’s also helping to set the positive tone in the markets.”
Emerging-market stocks have traded little changed this week amid holidays in the US and UK and as investors assess economic data for clues about the pace of US interest-rate increases. While traders have scaled back bets of a jump in borrowing costs in the past week to 22% at the June meeting, they’ve boosted odds of a hike in July to 53%.
The MSCI Emerging Markets Index of shares rose 0.2% to 809.06 as of 13:15. Saudi Arabia’s Tadawul All Share Index climbed 0.4%, while Czech, Hungarian and Polish benchmarks added more than 0.5%.
Currencies
An MSCI gauge of developing-nation currencies climbed 0.1%. The rouble rose 0.2% against the dollar. Brent crude rose as much as 1.2 percent on Thursday to $50.30 a barrel, before dropping back to $49.87 a barrel.
“High oil prices were one of the main enduring positive factors for emerging markets during May,” said Koon Chow, a London-based strategist at Union Bancaire Privee, which oversees $112bn. “People are a little bit nervous ahead of the OPEC meeting” in case it triggers a selloff in the commodity, he said.
The won climbed 0.5%, the most in a week, after a central bank report showed South Korea’s economy expanded more in the first quarter than analysts forecast.
Bonds
The premium investors demand to own emerging-market debt over US Treasuries rose one basis point to 395, according to JPMorgan indices.
Turkish bonds gained for a third day, with the yield on 10-year notes falling 6 basis points to 9.83%, the lowest level in almost a month. The rate on similar-maturity bonds dropped 3 basis points to 9.32%. The ECB on Wednesday kept its stimulus program unchanged and said it will start buying corporate bonds next week.
Overseas holdings of Indian rupee-denominated government and corporate bonds dropped by $201m on Wednesday, the most since May 17, the National Securities Depository said. The nation’s bonds declined for a second day after a local-language newspaper on Wednesday reported central bank Governor Raghuram Rajan wasn’t seeking a second term.
