Emerging Stocks Surge Seventh Day on Easing Fears Over Russia to Iraq

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Emerging Stocks Surge Seventh Day on Easing Fears Over Russia to Iraq

Emerging market shares soared for a seventh day as anxiety in Russia and Iraq calmed and US housing starts rose.

The MSCI Emerging Markets Index climbed 0.6% to 1,083.76 as of 1:33 pm in New York. Akbank TAS, a bank, was the best performer in the second day of an upward trend in the Borsa Istanbul 100 Index. The Micex gauge stretched its longest rally since Sept. 11 as OAO Moscow Exchange advanced to a six-week high. Ibovespa gained to the highest level since March.

Figures released on Tuesday showed US housing starts rose in July to the highest point in eight months, highlighting the recent surge in developer optimism as the residential real-estate market adds some momentum.

The Red Cross reported it is close to formulating details of a safe-corridor plan for a Russian humanitarian aid convoy in southeastern Ukraine, as Kurdish and Iraqi forces regained control of the largest dam in Iraq from Islamic State insurgents.

“Some of the geopolitical tensions which had rattled the markets over the last couple of weeks seem to be easing, with regards to Ukraine in particular,” William Jackson of Capital Economics Ltd told Bloomberg from London.

The measure for developing markets has soared 8.1% this year and its value stands at 11.3 times estimated 12-month earnings, the most costly point since April 2011, data compiled by Bloomberg showed. The MSCI World Index has climbed 4.4% in 2014 and exchanges at a multiple of 14.9.

According Business Recorder, EnergoKapital analysts expect the solid gains posted by Russian stocks over the past week to be followed by a short but drastic correction.

“But we aren’t seeing an acute deterioration in the news backdrop, and therefore we expect the buying mood will remain from the start of trading,”the analysts said.

Russian markets have been affected by the fallout due to the Ukraine crisis.

To contact the reporter of the story: Jonathan Millet at john@forexminute.com