By Anuchit Nguyen, Michael Patterson and Maria Levitov Bloomberg News
LONDON - Emerging-market stocks rose, driving the benchmark index to its biggest gain in three weeks, and currencies strengthened after U.S. President Barack Obama won re-election.
The MSCI Emerging Markets Index climbed 0.6 percent to 1,012.22 at 12:15 p.m. in London, the steepest advance since Oct. 17 on a closing basis as all 10 industry groups increased. China Mobile Ltd., the world’s biggest phone company by subscribers, rose the most in five months after the Standard reported the telecoms provider will start a 4G mobile data service in Hong Kong this year. Harmony Gold Mining Co., Africa’s third-largest producer of the metal, had its biggest advance in seven weeks as profit beat estimates. Eletropaulo Metropolitana SA, the Brazilian unit of AES Corp., fell for a second day after profit trailed projections.
Obama’s defeat of Republican Mitt Romney increases the odds that the U.S. Federal Reserve will maintain the third round of bond purchases known as quantitative easing, designed to boost the world’s largest economy, according to Michael Ganske, head of emerging-market research at Commerzbank AG in London. Countries in the MSCI index send about 17 percent of their exports to the U.S. on average, according to the World Trade Organization.
“A clear-cut win for Obama is good news,” Ganske said by email. “The political agenda of Romney had some question marks, such as naming China a currency manipulator and continuation of QE3.”
Romney had pledged to label China a currency manipulator and said he disagrees with the Fed’s measures to stimulate the economy and would replace Chairman Ben S. Bernanke at the end of his term in January 2014.
Obama’s victory means the value of the yuan won’t escalate into a major trade issue that would slow the global economy, Arjuna Mahendran, the Singapore-based head of Asia investment strategy at HSBC Private Bank, which oversees $409 billion, said in a telephone interview today.
South Korea’s won gained 0.5 percent per dollar to the strongest level in almost 14 months and Russia’s ruble added 0.6 percent, the most in three weeks.
The MSCI Emerging Markets Index surged 108 percent during the Fed’s first round of bond purchases, known as quantitative easing. The gauge has climbed 3.1 percent since the Fed announced a third round on Sept. 13. The MSCI index’s 30-day volatility, a gauge of price swings, dropped to 8.4, headed for the lowest closing level since January 2006.
The election result will help bolster stocks in the U.S. and Taiwan, Taipei-based Broadcasting Corp. of China reported, citing the island’s Financial Supervisory Commission Minister Chen Yu-chang.
Trading volumes for shares in Taiwan’s Taiex Index were 23 percent above the 30-day average, according to data compiled by Bloomberg. Volumes were 21 percent higher for the BSE India Sensitive Index and 33 percent higher for Poland’s WIG20 Index.
The Taiex gained 0.7 percent and India’s Sensex increased 0.5 percent, its sixth straight day of gains. The WIG20 rose 0.3 percent in Warsaw as the central bank cut interest rates.
The Hang Seng China Enterprises Index of mainland companies climbed 0.7 percent, snapping a two-day decline, before the Chinese Communist Party’s leadership congress that starts tomorrow.
Brazil’s Bovespa index fell 0.5 percent. Russia’s Micex slumped 0.2 percent, as oil slid 0.8 percent in New York. The Philippine Stock Exchange Index dropped 0.7 percent, paced by a 2.6 percent slump in Philippine Long Distance Telephone Co., the nation’s largest company by market value.