EMERGING MARKETS STOCKS RALLY FOR NINTH DAY
Emerging markets stocks rose for a ninth day and the Taiwan dollar led gains in higher-yielding currencies after the Federal Reserve indicated United States interest rates will stay near record lows, Bloomberg reported on Wednesday.
Yuan forwards advanced on speculation China would let its currency appreciate.
The MSCI Emerging Markets Index added 0.5 per cent to reach the highest level since July 2008 in London. The Taiwan dollar strengthened against all 16 of its most-traded peers. Futures on the Standard and Poor's 500 Index fell 0.3 per cent. Greek bonds fell, widening the premium investors demand on 10-year notes over benchmark German securities by 16 basis points to 400 basis points.
Fed minutes showed the US was likely to keep rates on hold, nurturing the recovery in the world's biggest economy, at the same time as Treasury Secretary; Mr. Timothy Geithner prods China to revalue the yuan. Policy makers are considering allowing the yuan to trade against the ruble, the South Korean won and the Malaysian ringgit, according to an official at the China Foreign Exchange Trade System, as the nation diversifies its foreign reserves from the dollar.
For the Fed, there's 'nothing on the radar screen to suggest that they want to raise rates,' Michael Dicks, head of research in London at Barclays Wealth, which oversees about $220bn, said in an interview on Bloomberg Television. 'The global economy is doing reasonably well. The corporate sector is also doing pretty well. That's probably going to persist for some time.'
The MSCI Emerging Markets Index extended its longest rally in almost six months, led by Asia. Pakistan's Karachi 100 Index climbed one per cent while Indonesia's Jakarta Composite Index and the Stock Exchange of Thailand Index added 0.6 per cent. Croatia's Zagreb Crobex index gained one per cent, Romania's BET Index rose 0.9 per cent and Estonia's OMX Tallinn index advanced 0.7 per cent.
Emerging-market currencies strengthened, with the Taiwan dollar appreciating for a third day against the US currency, advancing 0.4 per cent, and 0.5 per cent against the yen. The ruble and Turkey's lira climbed 0.1 per cent against the dollar.
The euro weakened, trading near its lowest level against the dollar in almost two weeks, after a report showed the economy of the 16 nations sharing the currency failed to grow in the fourth quarter.
Greek two-year notes fell for a sixth day after a record slide yesterday. The yield on the 2012 note rose nine basis points, after climbing 124 basis points. The government plans to start marketing dollar-denominated bonds to US investors this month. The two-year spread to bunds widened by 7 basis points to 5.39 percentage points. Bonds sold by Germany, the region's biggest economy, are used by investors as a benchmark.
The Stoxx Europe 600 Index slipped 0.1 per cent as basic resources companies dropped. BHP Billiton Ltd., the world's biggest mining company, fell 1.8 per cent in London. Declines were limited as Allied Irish Banks Plc surged 12 per cent in Dublin after Royal Bank of Scotland Group Plc recommended buying the shares.