Emerging market stocks rallied the most in seven days on speculation that China would announce new stimulus measures to revive the world’s biggest developing economy, thereby boosting the demand for raw materials.
The MSCI Emerging Markets Index added 1.9 per cent to 485.10 in London, after climbing as much as 2.1 per cent, the biggest intraday gain since February 23. Russia’s Micex index increased 3 per cent. Romania’s benchmark BET equity index jumped the most in a week, advancing 2.4 per cent.
The MSCI EM Asia index saw its steepest gain in almost a month after Li Deshui, China’s former statistics bureau head, said that Premier Wen Jiabao will announce “a new stimulus package” in his annual address to the nation’s legislature tomorrow, adding to the government’s $585-billion spending plan. The price of copper due to be delivered in three months rose 1.2 per cent in London. China is the world’s biggest user of the metal. Lead, nickel and zinc also advanced.
Chinese stocks surged the most in three months, with the CSI 300 index rising 6.7 per cent. The Kuwait Stock Exchange Index advanced 2 per cent, while the Dubai Financial Market General Index and the FTSE/JSE Africa All Shares Index in South Africa both increased 1.8 per cent.
The extra yield investors' demand to own developing nations’ bonds instead of US Treasuries fell by 4 basis points to 6.73 percentage points, according to JPMorgan Chase & Co’s EMBI+ Index.
