Emerging-Market Stocks Rise for Biggest Weekly Gain in 5 Months

By Laura Cochrane
May 8 (Bloomberg) -- Emerging-market stocks rose, heading for their biggest weekly gain in five months, as stress tests indicated U.S. banks may be able to plug their capital hole with private funds and higher oil prices lifted energy companies.
The MSCI Emerging Markets Index added 0.4 percent 717.99 at 8:06 a.m. in London, extending the weekly gain to 8.3 percent, the steepest climb since Dec. 12.
“We are witnessing a rise in risk appetite,” emerging- market analysts at ING Groep NV wrote today in a research note.
The MSCI Emerging Markets Banks Index reached a seven-month high, boosted by a 7.8 percent gain in China Merchants Bank Co. after U.S. bank stress tests showed the 19 largest banks face a $74.6 billion capital hole, less than the hundreds of billions of dollars seen by outside analysts.
PetroChina Co., China’s largest oil producer, climbed 3.5 percent as crude oil increased as much as 1.2 percent to $57.39 a barrel in New York, poised for its biggest weekly gain since March, while OAO Rosneft, Russia’s largest oil producer, rallied 1.9 percent to the highest level since September.
Crude oil is set to reach $62.65 a barrel “in the near future” and rally to $78 within six months as prices retrace the surge that started in 1998, according to technical analysis by PVM Oil Associates Ltd.
The extra yield investors demand to own developing nations’ bonds instead of U.S. Treasuries fell three basis points to 4.64 percentage points, according to JPMorgan Chase & Co.’s EMBI+ Index. The gauge is poised for its biggest weekly decline since October.