A surprise
interest-rate cut in India sent banks soaring and as Chinese
equities surged. The Swiss central bank’s decision to remove a
cap on the franc pummeled currencies in eastern Europe, as Bloomberg reports.
India cut the benchmark repurchase rate in an unscheduled review to revive growth after inflation eased. China’s aggregate financing, a measure of credit growth, soared to 1.69 trillion yuan ($273 billion), exceeding the 1.2 trillion yuan median estimate in a Bloomberg survey. A gauge tracking 100-day price swings surged to the highest level since December 2013 after 30-day volatility last week hit a 15-month high.
The MSCI Emerging Markets Index gained 0.4 percent to 959.84
at 11:45 a.m. in London. The MSCI World Index has dropped 2.5
percent this month, taking its valuation to a multiple of 15.3.
The Shanghai Composite Index surged 3.5 percent as PetroChina Co. gained the most in a week. While new yuan loans missed economists’ forecasts, shadow lending rose to the highest since monthly recorsd were first compiled in 2012.
The Hang Seng China Enterprises Index added 1.5 percent.
India’s Sensex Index headed for the
steepest gain since May and the Shanghai Composite Index jumped
the most in a week. All but one of 10 industry groups in the developing-markets
measure advanced, paced by energy and financial companies. DLF
Ltd., an Indian developer, jumped 11 percent, the steepest
increase among emerging-country shares. The S&P BSE Sensex advanced 2.7 percent and the rupee
halted a two-day loss. Reserve Bank of India Governor Raghuram
Rajan cut the main repurchase rate in Asia’s third-largest
economy to 7.75 percent from 8 percent.
Malaysia’s ringgit surged 1 percent, the most since October 2013, as the overnight rally in crude prices tempered concern that the oil-exporting nation will see revenue fall.
Russia equities increased for the third day after yesterday’s rally in crude boosted appetite for assets of the world’s largest energy exporter. The ruble descended 1.5 percent versus the dollar as Brent resumed its slide today.
Shares in Poland and
Hungary retreated more than 1.6 percent as companies with loans
denominated in Swiss francs tumbled. The forint and zloty each tumbled more than 17 percent
against the Swiss franc.
The Swiss National Bank scrapped its minimum exchange rate of 1.2 francs against the euro today, abandoning a key tool in its policy kit designed to shield the economy from the euro area’s sovereign debt crisis. The franc slid as much as 29 percent versus the euro.
OTP Bank, Hungary’s largest lender which has franc-denominated corporate loans, fell as much as 5.8 percent, while Bank Zachodni decreased 6.4 percent in Warsaw.
