Emerging Stocks Rise 5th Day on China as Petrobras Soars

Emerging-market stocks advanced for a fifth day after China called for reform measures to consolidate the nation's recovery. Brazil's Ibovespa rallied to the highest level since May as Petroleo Brasileiro SA (PETR4) soared.

The MSCI Emerging Markets Index added 0.1 percent to 1,042.66. The Shanghai Composite Index rose 1.6 percent. The Ibovespa rallied as Petrobras surged 5.3 percent after a group led by the state-run oil company won a license to develop Brazil's biggest oil discovery under terms that exceeded estimates. The Borsa Istanbul National 100 Index climbed 3.5 percent, while Poland's WIG20 Index jumped to a nine-month high.

China will boost financial support to small businesses, cut overcapacity and look for new engines to drive consumption, the State Council said in a statement yesterday. The nation's leaders will meet in November to map out policies to reform the economy and sustain long-term growth at about 7 percent. The Federal Reserve won't taper bond purchases until March as the government shutdown slowed growth, a Bloomberg survey showed.

"It improves the China story, it takes some of the risk and volatility out of it," Peter Sorrentino, who helps manage about $14.7 billion at Huntington Asset Advisors in Cincinnati, said by phone. "That in a way will benefit the global story. With the U.S. taper being on hold, we're pretty favorably disposed towards emerging markets right now."

The benchmark gauge for developing nations has slid 1.2 percent this year to trade at 10.8 times projected earnings, compared with the valuation of 14.3 for the MSCI World Index.

Options Prices

The iShares MSCI Emerging Markets Index exchange-traded fund dropped 0.2 percent to $43.24. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, declined 5.6 percent to 18.86.

The Ibovespa (IBOV) rose 1.3 percent as Petrobras jumped the most since Aug. 22. The company and partners Royal Dutch Shell Plc, Total SA, Cnooc Ltd. and China National Petroleum Corp., pledged to the government the minimum 41.65 percent of profit oil, or the barrels remaining after all costs are covered, to win the 35-year project in deep waters of the Atlantic Ocean. Bank of America Corp. said in an Oct. 14 report that profit oil of less than 50 percent would be seen as beneficial for Petrobras.

Most Russian equities retreated as crude oil, the nation's main export earner, declined. The Borsa Istanbul National 100 Index gained for a fourth day as Turkiye Garanti Bankasi AS jumped the most in a month. Poland's WIG20 Index climbed to the highest level since Jan. 24 as Bank Pekao SA extended a three-day rally to 5 percent.

China, India

China's stocks rose the most in a week. Shanghai Metersbonwe Fashion & Accessories Co. jumped 10 percent, leading gains in consumer companies reliant on economic growth. Shanghai Baosight Software Co. (600845) paced the rally in technology shares after signing a contract to provide data-center services to Alibaba Group Holding Ltd.

India's S&P BSE Sensex rose, holding at a three-year high, amid better-than-estimated corporate earnings. Engineering company Larsen & Toubro Ltd. (LT) rallied to a three-month high and Asian Paints Ltd. (APNT) surged about 6 percent after reporting profit that beat forecasts.

Thailand's SET Index dropped the most among 94 world gauges tracked by Bloomberg amid speculation that a bill granting amnesty for political offenses will spur protests against the government.

Nineteen out of the 24 developing-nation currencies tracked by Bloomberg retreated. The rand depreciated for the first time in four days against the dollar on bets Finance Minister Pravin Gordhan will revise fiscal targets this week.

The premium investors demand to own emerging-market debt over U.S. Treasuries slid three basis points, or 0.03 percentage point, to 308 basis points, according to JPMorgan Chase & Co.