Most Emerging-Market Stocks Advance Before U.S. Payroll Report 

payroll

Most emerging-market stocks rose, with the benchmark index holding near a 14-month high, before U.S. jobs data and a euro-area monetary-policy decision today.

Anhui Conch Cement Co. (914), China’s largest producer, rose 5.1 percent in Hong Kong after saying it expects first-half net income to surge about 90 percent from a year earlier. Daewoo International Corp. (047050) jumped 4.9 percent in Seoul after projecting second-quarter operating profit will double. Taiwan Semiconductor Manufacturing Ltd. advanced to a record for a fourth straight day, leading a gauge of emerging technology stocks to an all-time high. The Philippine peso slid 0.2 percent versus the dollar, snapping a five-day rally.

The MSCI Emerging Markets Index was little changed at 1,060.48 as of 1:56 p.m. in Hong Kong, with 264 shares gaining and 238 falling. The gauge closed yesterday at the highest level since May 9, 2013. Data from China today showed a mixed picture for the services industry as an official non-manufacturing purchasing managers’ index for June slipped and a gauge from HSBC Holdings Plc and Markit Economics rose. Monthly U.S. payroll data are due today, while the European Central Bank also meets after enacting unprecedented stimulus last month.

“China’s data has shown signs of economic recovery,” Saharat Chudsuwan, first senior vice president at Tisco Asset Management Co., which oversees about $4.9 billion of assets, said by phone from Bangkok. “Jobs data will indicate that the U.S. economy has very strong growth, which should be good for developing countries because the U.S. has now become the main driver for their growth.”

Payroll Report

The developing-nation gauge has gained 5.8 percent this year and trades at 11 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has risen 5.7 percent in 2014 and is valued at a multiple of 15.2.

The U.S. monthly payrolls report comes after ADP Research Institute data yesterday showed U.S. employment rose in June by the most since 2012, with more workers hired than economists projected. Economists estimate 215,000 workers were added to non-farm payrolls in the U.S. last month, after an increase of 217,000 in May, according to the median of 94 forecasts compiled by Bloomberg.

Weekly jobless claims numbers are also due today, along with the Institute for Supply Management’s gauge of service industries.

The Shanghai Composite Index added 0.1 percent to a two-week high, rising for a fourth day, while the Hang Seng China Enterprises Index also climbed 0.1 percent. Anhui Conch gained the most in three months in Hong Kong after saying it expects profit to jump on an increase in sales and prices.

China Services

An index of China’s services industry from HSBC and Markit rose to 53.1 in June from 50.7 in May, the highest since March 2013, a report showed today. Readings of more than 50 indicate expansion. Separate data showed the official non-manufacturing gauge slid to 55 in June from 55.5 the month before.

China’s official gauge of factory activity climbed to 51 in June, the fastest pace this year, according to data on July 1. The central bank has cut reserve ratios for some lenders and outlined spending amid efforts to stabilize the economy. Premier Li Keqiang said yesterday that while some leading indicators have shown signs of recovery, the economy was still facing downward pressure.

The ECB is projected to keep key interest rates on hold today after cuts last month sent the deposit rate into negative territory.

The Philippine peso dropped for the first time in six days. The Philippine Stock Exchange Index gained 0.6 percent, while Taiwan’s Taiex Index (TWSE) rose 0.5 percent. Equity gauges in South Korea and Indonesia declined at least 0.2 percent.

 

Source: businessweek

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