Emerging-market stocks headed for the biggest first-quarter rally in three years on signs that China will do more to support growth in the world’s second-largest economy.
China Resources Land Ltd and Longfor Properties Co climbed at least 3.5% in Hong Kong after China announced measures to stem a property slump. A gauge of Hong Kong-traded mainland shares rose to a 2011 high. Indonesian equities gained 1% and the Philippine stock gauge headed for a record close. South Korea’s won slid 0.5% versus the dollar as the central bank signalled prospects of more monetary easing.
The MSCI Emerging Markets Index added 0.5% to 973.59 at 1.08pm in Hong Kong. The gauge has increased 1.8% since the end of 2014, poised for the best first quarter since 2012, as central banks in Asia and Europe boosted stimulus.
China reduced down payments for second homes and broadened a sales-tax exemption on Monday, a day after central bank governor Zhou Xiaochuan said more can be done to support growth.
“Investors have raised bets that the Chinese government will have to take more action,” Komsorn Prakobphol, an investment strategist at Tisco Financial Group Plc, said by phone from Bangkok. “It cuts the risk of a further slowdown, which will benefit developing markets.”
All 10 industry groups in the developing-nation gauge rose, led by energy and health-care companies. The Hang Seng China Enterprises Index of Chinese stocks listed in Hong Kong surged 1.5%, extending yesterday’s 3.4% jump.
Property gains
China Resources Land headed for the highest close since October 2013 and Longfor Properties increased to the highest level since Jan 6. The Shanghai Composite Index rose 0.2%, set for the highest close sincee March 2008.
The developing-nation index trades at 11.8 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has advanced 2.7% in 2015 and is valued at a multiple of 16.7.
Indonesia’s Jakarta Composite Index headed for the sharpest advance since March 6 as PT Bank Mandiri rose 2.3% to a record. The Philippine Stock Exchange Index increased 0.8%, its fifth day of gains.
The won fell for a second day and the yield on the government’s three-year bonds slid to a record low. The Bank of Korea will put priority on macroeconomic factors such as economic growth and inflation, central bank governor Lee Ju Yeol said Monday after markets closed. The Kospi index rose 0.3%.
Vietnam’s VN Index gained 1%, poised for the sharpest advance since March 3. Equity gauges in Malaysia, India, Thailand and Taiwan climbed at least 0.3%.