Emerging market shares surged, driven by shares of Hong Kong-listed Chinese which rose to their highest level in four months, fuelled by speculation that the government will move ahead to boost the economy after manufacturing activity declined.
The Hang Seng China Enterprises Index (HSCEI) surged 3.1 percent in Hong Kong, its highest since November 2013. Yanzhou Coal Mining Co., which reported profit that beat analysts’ estimates, posted its biggest advance in six months. India’s S&P BSE Sensex grew a record 1.3 percent, while the Russian Micex Index inched 0.5 percent higher, according to Bloomberg data.
The rupee advanced 0.3 percent against the dollar while the South African rand jumped 0.2 percent. The Russian ruble, on the other hand, advanced 0.4 percent.
The MSCI Emerging Markets Index rose 1 percent to 954.37 in late afternoon trade in Hong Kong, paving the way for its highest close since March 11. The Hang Seng China measure rose 2.8 percent to post its highest advance since March 7, after sliding 13 percent since January fuelled by declining retail, export and manufacturing activity in the country.
However, while the Chinese manufacturing activity has slowed down for the fifth consecutive month this March, investors are optimistic that the government will take measures to jolt back the industry.
“Definitely China’s government will do something to avoid the slowdown,” Jeffrosenberg Tan, a Jakarta-based investment manager at PT Sinarmas Asset Management told Bloomberg. “They will not let the economy slow. That is not in their best interest.”
The MSCI emerging market barometer has plummeted 4.8 percent in 2014, and is estimated to be 9.2 times projected 12-month earnings. In contrast, the MSCI World Index has fallen 0.4 percent this year, and is worth 14.7 times.
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