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Manila - Emerging-market stocks rose to the highest level in eight months as data showed China’s exports stabilized and optimism grew over prospects for stimulus in major economies. Developing-nation currencies retreated.
A gauge of mainland companies traded in Hong Kong advanced to a one-month high amid signs that the world’s second-biggest economy is steadying. China Oilfield Services led increases in energy shares.
Malaysia’s ringgit forwards briefly extended losses and the nation’s stocks climbed after the central bank cut interest rates. Vietnamese equities reached a 2008 high. A measure of currencies halted a four-day gain as South Africa’s rand weakened from a two-month high.
Developing stocks rallied for a fifth day, sending valuations in the benchmark measure to the highest level in more than a year. The UK’s vote to leave the European Union has bolstered prospects for stimulus in major economies, boosting demand for riskier assets.
Foreign investors this week plowed more than $2bn into equities in India, Indonesia, South Korea, Philippines, Thailand and Taiwan, data compiled by Bloomberg show.
“We could see more monetary stimulus and quantitative easing that will help boost global growth,” Jonathan Ravelas, chief market strategist at BDO Unibank, said in Manila. “The party goes on but it is prudent for investors to re-balance their portfolios by taking some money out.”
The Bank of England is seen easing policy this week, while Japan’s Prime Minister Shinzo Abe ordered his economy minister to compile stimulus measures this month.
Futures contracts show a 34% hance the Federal Reserve will raise interest rates by year-end even after a recent strong US jobs report.
Stocks
The MSCI Emerging Markets Index rose 0.1% to 855.10 at 09:22. The gauge has advanced 7.6% this year and trades at 12.2 times its 12-month projected earnings, the highest level since May 2015. The MSCI World Index of developed markets has increased 1.9% and is valued at a multiple of 16.2 times.
Hong Kong’s Hang Seng China Enterprises Index advanced 0.8 percent, its third day of gains. The Shanghai Composite Index increased 0.4%. Overseas shipments rose 1.3% in yuan terms from a year earlier, the customs administration said Wednesday. Imports fell 2.3% to leave a trade surplus of 311.2 billion yuan. Trade in dollar terms typically is posted shortly after yuan data.
Currencies, bonds
The MSCI Emerging Markets Currency Index retreated 0.1% after a four-day advance. The rand dropped 0.4% after reaching a two-month high on Tuesday.
In Malaysia, one-month non-deliverable forwards dropped as much as 1% to 4.0058 per dollar before paring the decline to 3.9855 as of 09:16.
Bank Negara Malaysia lowered the overnight policy rate to 3% from 3.25%. Goldman Sachs was alone among the 18 economists surveyed that had projected the move. Before Wednesday’s decision, the central bank had left the benchmark rate unchanged since it raised rates in July 2014.
