Emerging-market shares rose to almost a month high on Tuesday as expectations of the FED raising interest rates in June improved business outlook for exporters from developing economies.
A gauge of emerging-market currencies rose for the first time in three days, Chinese shares jumped the most amid speculation MSCI inc. may include yuan-denominated shares in its global benchmark indexes in June.
Gains in oil prices and developed nation shares in the past week also increased demand for higher yielding assets, helping them reduce losses made earlier in the month.
“Resilient oil prices are supporting the sentiment for emerging-market assets, which is also guided by a sense that improving U.S. economy is good for emerging markets,’’ said Roy Teo, a senior currency strategist at ABN Amro Bank NV in Singapore. “Going forward, the pace of Fed rate hikes and economic growth in China will be influencing the EM assets.”
The MSCI Emerging Markets Index of shares climbed 0.4 percent as of 11:22 a.m. in Hong Kong, set for its highest close in three weeks. The MSCI Emerging Markets Currency Index climbed 0.2 percent, reducing this month’s loss to 2.9 percent.
The probability that mainland Chinese stocks will be included in MSCI’s indexes got a boost after the Shanghai and Shenzhen stock exchanges on Friday published rules restricting trading halts.