(Bloomberg News) Emerging-market stocks rose from a five-month low as Premier Wen Jiabao said China should focus more on supporting the economy, spurring gains in commodities and offsetting concern Europe's debt crisis will worsen.
The MSCI Emerging Markets Index rose 0.5 percent to 911.21 as of 12:02 p.m. in New York, snapping a seven-day decline. Russia's Micex Index jumped the most since March 11, as OAO Tatneft, a regional oil producer, advanced 4.8 percent. Brazil's Bovespa climbed the most since April 12 as shares of Banco do Brasil SA, Latin America's largest lender by assets, had the sharpest jump in almost seven months.
China should adopt a "proactive fiscal policy and a prudent monetary policy" to bolster the world's second-largest economy, Wen said over the weekend. German and French finance chiefs met in Berlin today before a European Union summit on May 23 after concern Greece will exit the euro erased about $4 trillion from global stock markets this month. The Standard & Poor's GSCI index of 24 commodities added 0.5 percent to rebound from a 2012 low.
"The fact that China is getting ahead of things and shifting toward an easing mode is making people more comfortable with getting into the emerging markets," Dave Lutz, head of ETF trading and strategy at Stifel Nicolaus & Co., said by phone from Baltimore today. "Emerging markets are dependent on China's growth."
Brazil Picks Up
Growth in Brazil, the world's sixth-biggest economy, is picking up after a "weak" first quarter, reducing the need for additional stimulus measures, Brazil's Finance Minister Guido Mantega said in a May 18 interview in Sao Paulo.
The Bovespa rose 2.4 percent to gain for a second day. Banco do Brasil, a state-controlled bank, climbed 5.1 percent on speculation it will manage three local debt issues totaling 2.6 billion reais ($1.28 billion), Valor Economico reported, without saying where it obtained the information.
Cia Siderurgica Nacional S.A., Brazil's third-largest steelmaker, jumped 6.1 percent, snapping a six-day decline. The company expects demand to increase 5 to 6 percent this year, David Salama, the company's head of investor relations, said at the Rio Investors Day conference today.
Russia's Micex Index jumped 2.1 percent in Moscow. Mail.ru, the largest Russian-language Internet company and an investor in Facebook, fell 9.1 percent, the most since Oct. 4, in London.
The WIG20 Index jumped 1.7 percent in Warsaw and the BUX Index advanced 0.7 percent in Budapest. The FTSE/JSE Africa All Shares Index retreated 0.2 percent in Johannesburg, as Naspers Ltd., Africa's largest media group, slid 5.2 percent.
Rebound
Emerging-market equities rebounded after nine straight weeks of losses, the longest losing stretch since 1994. The MSCI index slumped 6.6 percent last week to the lowest level since Dec. 20 amid concern over a deepening European crisis.
The gauge's 14-day relative strength index, which tracks momentum by comparing closing prices with daily trading ranges, fell to 13.9 at the end of last week, the lowest level since June 2002.
The developing-nations index is valued at 9.8 times estimated profit and has lost 0.6 percent this year, compared with the 11.6 multiple for the MSCI World Index, which has added 0.4 percent this year.
The IShares MSCI Emerging Markets Index exchange-traded fund, the most-traded ETF tracking developing-nation shares, added 1.5 percent to $37.84 today.
China, Thailand
The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, fell 8.3 percent to 34.31.
The Shanghai Composite Index rose 0.2 percent, while South Korea's Kospi Index added 0.9 percent. The Hang Seng China Enterprises Index was little changed.
Tencent Holdings Ltd., China's biggest Internet company by revenue in which Naspers owns a 35 percent stake, fell 3.4 percent in Hong Kong after Facebook Inc.'s shares stayed near their initial public offering price on May 18.
Thailand's economy unexpectedly expanded in the first quarter, the National Economic and Social Development Board said today.
A gauge of emerging-market technology stocks gained 1.1 percent to lead advances as Quanta Computer Inc. added 5.4 percent in Taiwan.
Rupee Falls To Record
The BSE India Sensitive Index gained 0.2 percent. India's rupee fell 1.1 percent to a record 55.0350 against the dollar. India's fiscal policy is "too loose" and that is widening the current-account deficit and spurring inflation, Richard Iley, Hong-Kong based chief economist for Asia at BNP Paribas SA, wrote in a research note released today.
The Turkish lira gained 0.4 percent against the dollar, strengthening for the first time in seven days and snapping its longest losing streak in six months after the central bank tightened monetary policy.
The ruble strengthened 0.4 percent against the dollar, snapping an 11-day decline, as oil, Russia's main export, rose. South Africa's rand appreciated 0.7 percent.
The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell three basis points, or 0.03 percentage point, to 404, according to JPMorgan Chase & Co.'s EMBI Global Index.