Emerging-market stocks climbed for a fourth day, as higher commodity prices and the first expansion in China’s manufacturing in nine months boosted speculation that the worst of the economic crisis may be over.
The MSCI Emerging Markets Index gained 3.7 per cent to 687.21, the highest since October 6, as of 11:35 am in London. Taiwan’s Taeix index advanced 5.6 per cent, extending its two-day gain to 13 per cent, the biggest back-to-back rally in more than 18 years after Goldman Sachs Group upgraded the island’s equities to “overweight”.
Poland’s WIG20 Index added 3.1 per cent, and Russia’s Micex rallied 2.9 per cent.
KGHM Polska Miedz SA, Poland’s only copper producer, jumped 4.8 per cent, while OAO Norilsk Nickel, the world’s biggest producer of the metal, gained 2.5 per cent. Copper and zinc futures climbed by the exchange-imposed 6 per cent daily limit in Shanghai, helping boost revenue for emerging economies sustained by exports.
“The worst-case scenario is now on the backburner and the future doesn’t seem as gloomy anymore,” said Rabih Sultani, hedge fund manager at Duet Mena, part of a group managing $2 billion globally. “Liquidity is slowly returning to the market as China proved more resilient.”
Sasol, the world’s biggest maker of motor fuel from coal, advanced 5.3 per cent, while OAO Lukoil, Russia’s second-largest oil company, gained 2.9 per cent as crude oil traded near a five-week high.
China’s manufacturing expanded after declines in export orders moderated and investment surged because of the government’s 4-trillion yuan ($586-billion) stimulus package.
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