Emerging-market stocks rose for the first time in eight days, led by exporters, after U.S. President Barack Obama expressed confidence that lawmakers will reach a budget agreement.
Samsung Electronics Co. (005930), which got 28 percent of its third- quarter revenue from America, and Cosco Pacific Ltd. (1199), the container-terminal arm of China's largest shipping group, gained more than 1.9 percent. Kangwon Land Inc. (035250) advanced the most in 14 months in Seoul on speculation it will win government approval to expand its gambling business. OAO Lukoil added 1 percent in Moscow as oil advanced for a second day.
The MSCI Emerging Markets Index (MXEF) gained 0.4 percent to 973.70 at 4:40 p.m. in Hong Kong, snapping a seven-day, 3.7 percent losing streak and rebounding from its lowest close in 10 weeks. Obama started a new round of deficit-reduction talks with congressional leaders on Nov. 16 in a bid to avoid automatic tax increases and spending cuts that threaten to throw the country into a recession. The 21 countries in the MSCI emerging-market index send about 17 percent of their exports to the U.S., World Trade Organization data show.
"With improved news flow of progress being made on bipartisan talks regarding the fiscal cliff, we are seeing a technical relief rally in equity markets today," Geoffrey Ng, who helps oversee $1.8 billion as chief executive officer at Hong Leong Asset Management Bhd. in Kuala Lumpur, wrote in an e- mail. "Investors remain guarded and apprehensive for a quick fix to the fiscal cliff issue."
South Korea's Kospi (KOSPI) index climbed 0.9 percent, while Russia's Micex Index (INDEXCF) advanced 0.8 percent. The Shanghai Composite Index rebounded in the final hour of trading after dipping below 2,000, rising 0.1 percent from earlier losses of as much as 0.9 percent. Its trading volumes were about 31 percent lower than the 30-day average, data compiled by Bloomberg show.
Gauges of raw material and industrial stocks in the MSCI Emerging Markets Index advanced 0.7 percent, leading gains among the 10 industry groups. The measures of energy stocks and raw- material companies rebounded from at least seven days of declines on higher commodity prices.
The MSCI Emerging Markets Index has climbed 6.2 percent this year, compared with the 6.5 percent gain by the MSCI World Index (MXWO) of developed countries. The emerging-markets gauge trades at 11.2 times estimated profit, compared with the MSCI World's 12.9, according to data compiled by Bloomberg.
"I am confident we can get our fiscal situation dealt with," Obama said in Bangkok yesterday, where he began a three- nation trip in Southeast Asia that will include the first visit by a sitting U.S. president to Myanmar.
Source: BusinessWeek.com | Gan Yen Kuan