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Bloomberg

Emerging-market stocks rose, with the benchmark gauge gaining in almost two weeks, and bonds rallied as China cut interest rates and Mario Draghi signaled the European Central Bank may broaden stimulus.

Cnooc Ltd. led energy shares higher in Hong Kong, while KGHM Polska Miedz SA of Poland and Brazil’s Vale SA jumped the most this month as commodities advanced. The yield on Hungary’s 10-year bond dropped four basis points to 3.68 percent and the rate on Polish notes slid to a record 2.50 percent. Russia’s ruble headed for the longest rally since May versus the dollar.

The MSCI Emerging Markets Index rose 1 percent to 999.48 at 1:15 p.m. in London, taking this week’s gain to 0.9 percent. Draghi said the ECB needs to accelerate inflation quickly and may broaden its asset-purchase program. The People’s Bank of China lowered its lending and deposit rates to support the economy, the first cuts since July 2012.

“This is a great signal for risk sentiment, fueling appetite for risky assets in global EM,” Benoit Anne, head of emerging-markets strategy at Societe Generale SA, said by e- mail. “We are observing a major central bank front” from Asia to Europe, he said.

All 10 industry groups in the emerging-markets measure rose, led by energy stocks. Cnooc, China’s biggest offshore-oil producer, climbed the most in a month, while South Africa’s Sasol Ltd. added 5.1 percent. Brent crude and West Texas Intermediate headed for their first weekly advance since September.

South Africa’s benchmark gauge rallied 2.6 percent and Poland’s WIG20 increased 1.2 percent, leading gains in emerging Europe and Africa. Brazil’s Ibovespa increased 1.9 percent.

Currencies Rally

The ruble rose 1.5 percent versus the dollar, extending the five-day appreciation to 3.6 percent. Russia is the world’s largest oil exporter. Brazil’s real strengthened 0.9 percent, the biggest advance in emerging markets after the ruble. South Africa’s rand strengthened 0.4 percent. Against the euro, all but one of the 24 major developing-nation currencies gained.

“Emerging markets are waiting for a fresh wave of capital inflows driven by ECB’s stimulus,” Piotr Matys, a London-based emerging markets strategist at Rabobank, said by e-mail.

The ECB is trying to boost the size of its balance sheet to early-2012 levels, signaling an increase of as much as 1 trillion euros ($1.25 trillion) to help revive the euro-area economy.

Commodity Stocks

KGHM, Europe’s biggest copper deposit, jumped 3.5 percent and Kumba Iron Ore Ltd. advanced 7.5 percent in Johannesburg. Copper led industrial metals higher in London. Vale, the world’s top iron-ore producer, climbed 4.3 percent.

Russia’s Micex Index fell 0.1 percent, trimming this week’s gain to 1.8 percent. UTair Aviation JSC dropped 2.2 percent after a unit of the Russian airline and helicopter company failed to redeem two tranches of bonds amid signs of a funding crunch in the nation.

The Nigerian Stock Exchange All Share Index fell 0.8 percent in the fourth day of losses, set for the weakest level since November 2013. Militants killed at least 45 people in an attack on the northeastern village of Azaya Kura in Borno state.

Equity gauges in Hong Kong and Shanghai earlier rose at least 0.7 percent as investors speculated China is taking steps to prevent a cash crunch. The central bank supplied funds on a short-term basis, according to two people with direct knowledge of the matter who asked not to be identified.

The MSCI developing-nation gauge has lost 0.3 percent this year and trades at 11.1 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has gained 4.2 percent this year and is valued at a multiple of 15.4.

The premium investors demand to own emerging-market debt over U.S. Treasuries narrowed four basis points to 303, JPMorgan Chase & Co. indexes show.