Emerging market stocks rose for the seventh consecutive day, the longest surge since last July when the Federal Reserve indicated it would continue with the economic support and investors’ anxiety over the Russia-Ukraine tensions eased.
The MSCI Emerging Markets Index rose 0.8 percent to 992.66 as of 11.08 a.m. in New York, reducing its steepest quarterly fall since June. Micex Index of Russia rallied 1.9 percent to a four-week high after Russian Foreign Minister met with U.S. counterpart John Kerry.
Brazil’s Ibovespa surged to a 11-week high, as the Turkish Lira led the gains among major currencies over speculation that a victory by Prime Minister Recep Erdogan’s party will tame capital flight by foreign investors.
The Federal Reserve Chair Janet Yellen disclosed that the “considerable slack” in the U.S. labor market indicates that more efforts are still needed to create more jobs. The MSCI Emerging Markets Index has dropped 16 percent since last May, when the Fed announced plans to reduce stimulus if the economy improved.
“The punchbowl is not being taken away,” Hank Smith, a Radnor, Pennsylvania-based chief investment officer at Haverford Trust Co., told Bloomberg. “The markets are expressing relief that the Fed will remain that backstop of support for the foreseeable future. That’s supportive of emerging markets.”
Borsa Istanbul 100 Index jumped to its steepest level in 3 months, while the Turkish Lira rose 2.3 percent. Ibovespa rose, as meat processor Marfrig Global Foods SA led gains by other Brazilian exporters. Water utility Sabesp surged after its fourth-quarter profits beat estimates.
Gains in automobile and metal companies pushed Indian stocks to a record high. However, Shanghai Composite Index fell as consumer and industrial goods firms plunged; while Egypt’s EGX 30 Index fell 3.6 percent.
To contact the reporter of this story; Samuel Rae at Samuel@forexminute.com