Emerging-market stocks rise; bonds gain
Shares in developing nations were on the brink of a bull market as oil traded near $40 a barrel and favorable shifts in centralbank policies supported riskier assets. Bonds extended this week's gains.
Emerging-market stocks advanced for a third day after the Federal Reserve this week reined in its forecast for interest-rate hikes in 2016. Futures signaled the Standard & Poor's 500 Index will rise for a third day and automakers led gains in Europe as a weaker euro boosted earnings prospects. U.S. crude was little changed, after soaring 11 percent in the last two days. Treasuries advanced and 10-year yields sank to a record low in Japan. More than $3.5 trillion has been added to the value of global equities this month and commodities have rallied amid central bank steps to spur growth. The Fed's move comple- mented a wave of monetary easing that saw Norway and Indonesia cut borrowing costs on Thursday, a week after the European Central Bank boosted stimulus. The People's Bank of China loosened lenders' reserve requirements at the start of this month.
"We've finally seen some signs of a light at the end of the tunnel," said William Hobbs, head of investment strategy at Barclays Plc's wealth-management unit in London. "Central banks will remain accommodative and this has brought a bit of an increase in risk appetite." The MSCI Emerging Markets Index rose 0.8 percent at 10:06 a.m. in London, bringing gains from a low in January to just shy of the 20 percent threshold of a bull market. Technology stocks led the advance after Tencent Holdings Ltd., Asia's biggest Internet company, posted a better-than-expected 45 percent jump in quarterly sales.
The Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong rose 1.2 percent, following a 2.4 percent rally on Thursday. The Shanghai Composite Index jumped 1.7 percent, with trading volumes 59 percent above the 30-day average, according to data compiled by Bloomberg.
New-home prices gained in 47 Chinese cities in February, compared with 38 in January, the National Bureau of Statistics said Friday, signaling efforts to clear a home glut may be bearing fruit after banks eased credit and the government relaxed curbs.
The Stoxx Europe 600 Index climbed 0.5 percent. Daimler AG and BMW AG led gains among carmakers.
Amid one of the weakest earnings seasons in at least nine years and oscillating faith in central banks, strategists have slashed expectations for European stocks, painting the gloomiest annual outlook in five years. The Euro Stoxx 50 Index is expected to advance 1 percent by the end of 2016. Only a few months ago, those same strategists were calling for a 12 percent rally.
S&P 500 futures rose 0.2 percent, as the equity gauge approaches its break-even level for the year. The Dow Jones Industrial Average on Wednesday erased its 2016 losses, as a weaker dollar spurred a rally in commodity producers and industrial shares that spread to the broader U.S. stock market.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, gained 0.2 percent following a twoday slide of more than 2 percent that drove it to an eight-month low. The Fed cited weaker global growth and turmoil in financial markets for its decision to reduce the number of interest-rate increases forecast for 2016. The U.S. currency added 0.5 percent to $1.1264 per euro, after falling 1.9 percent in the past three days. A gauge of 20 emerging-market currencies fell for the first time in three days, slipping 0.2 percent from a four-month high, as South Africa's rand, Russia's ruble and Turkey's lira lost at least 0.5 percent. The won strengthened 0.9 percent, capping a 2.6 percent weekly advance.
West Texas Intermediate oil slipped 0.3 percent to $40.09 a barrel, retreating from a three-month high. In addition to the dollar's decline, crude was supported this week by data showing U.S. output fell to the lowest level since November 2014 as well as a planned freeze on production by countries including Saudi Arabia and Russia.
Gold headed for a weekly gain as the dollar dropped. Bullion for immediate delivery was little changed at $1,257.49 an ounce, putting gains for the week at 0.6 percent. Silver touched the highest level in more than four months.