Emerging Stocks Rally Most in One Month as Brazil Jumps

Emerging stocks headed for the biggest advance in a month, led by Brazilian equities, as commodity producers surged after data showing slower inflation in China eased pressure for monetary tightening.

China National Building Material Co. jumped 5.8 percent in Hong Kong, while Drake & Scull International PJSC sent Dubai shares to the highest level since 2009. OAO Lukoil, Russia's biggest non-state oil company, added 2.1 percent. Brazil's Bovespa (IBOV) index gained a third day as iron-ore producer Vale SA rallied. Thailand's baht breached 29 per dollar for the first time since 1997 and South Korea's won rebounded.

The MSCI Emerging Markets Index added 0.8 percent to 1,015.51 by 12:18 p.m. in New York, rebounding from the lowest level since Nov. 30. China's inflation eased more than forecast from a 10-month high as food-price gains ebbed, reducing pressure on policy makers to tighten credit as the world's second-largest economy recovers from a slowdown.

"Investors' perceptions on emerging markets have been so negative, so even with a little good news, the market can rebound easily," Soni Wibowo, a director at PT Bahana TCW Investment Management which manages about 22 trillion rupiah ($2.3 billion) in assets, said by telephone in Jakarta.

Commodity shares rose the most among 10 groups in the MSCI Emerging Markets Index (MXEF), adding 1.8 percent. The broader index has lost 3.8 percent this year, compared with a 6.8 percent gain in the MSCI World Index (MXWO) of developed-country stocks. The developing-nations measure trades at 10.6 times estimated 12- month earnings, compared with the MSCI World's multiple of 13.8, according to data compiled by Bloomberg.

BRIC Rally

The MSCI BRIC Index of stocks in the biggest emerging markets surged 1.5 percent. The iShares MSCI Emerging Markets Index exchange-traded fund rose 1.1 percent to $42.16. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a gauge of options prices on the fund and expectations of price swings, slid 4.7 percent to 17.87.

Brazil's Bovespa added 1.8 percent as exporters rallied after China's inflation data boosted the economic outlook for the nation's top trading partner. Vale surged 4.7 percent.

Russian shares rebounded from a four-month low as crude oil, the nation's chief export earner, rose. The Micex Index (INDEXCF) climbed for the first time in five days, adding 1.2 percent. Lukoil jumped the most since Sept. 14. Benchmark gauges in Hungary and Poland also gained.

The Hang Seng China Enterprises Index increased 1.7 percent, while the Shanghai Composite Index added 0.6 percent. China National Building Material, a cement maker, jumped the most since October.

Dubai Shares

Dubai's DFM General Index climbed 2.4 percent, the highest since November 2009, amid investor speculation first-quarter corporate profits may beat estimates and as banks repaid state loans ahead of time. Drake & Scull rallied 5.2 percent amid speculation the Dubai-based builder may be acquired. The company said it's not a target.

India's benchmark stock index fell to a seven-month low amid concern company earnings will trail analysts' estimates. Wipro Ltd. (WPRO) plunged the most in more than four years after the nation's third-biggest software maker began trading without its three non-technology divisions.

Thailand's baht jumped as demand for the nation's bonds rose amid unprecedented monetary easing in Japan. The won halted a three-day slide that pushed the South Korean currency to an eight-month low after investors judged its recent declines amid tensions with North Korea to be excessive.

The extra yield investors demand to own emerging-market debt over U.S. Treasuries was unchanged at 288 basis points, according to JPMorgan Chase & Co.'s EMBI Global Index.