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By Bloomberg

Emerging-market stocks headed for the longest stretch of weekly gains since September after a second Federal Reserve official cautioned against raising interest rates this year. Brazilian shares fell and the ruble retreated.

China Merchants Bank Co. led financial stocks higher as a drop in Chinese producer prices spurred bets the government will take steps to bolster growth. Brazil’s Ibovespa declined 1.5 percent. OAO Lukoil lost 4.3 percent in Moscow, as the ruble and Russian bonds fell before Fitch Ratings releases a credit-rating review today. The Czech koruna headed for its biggest weekly drop in 14 months as slowing inflation spurred speculation the central bank will try to weaken the currency.

The MSCI Emerging Markets Index rose 0.1 percent to 960.01 by 12:31 p.m. in London. The measure has increased for four straight weeks. Fed Bank of Chicago President Charles Evans said the central bank shouldn’t rush to raise borrowing costs, helping support demand for riskier assets before the release of U.S. payrolls data today.

“Any cautious approach to interest-rate normalization is positive for EM,” Martial Godet, the head of emerging-market equity and derivatives strategy at BNP Paribas SA in Paris, wrote in an e-mail. “The Fed will take no risk of triggering a correction of asset prices.”

Payrolls probably rose at a slower pace in December from a month earlier, while the unemployment rate declined, according to economists’ forecasts compiled by Bloomberg.

Fitch Review

Nine out of 10 industry groups in the emerging-markets measure rose, led by health-care stocks including Sino Biopharmaceutical Ltd., which rallied 7.6 percent in Hong Kong after Macquarie Bank Ltd. started the stock at outperform.

A gauge tracking 20 emerging-market currencies fell for the first time in three days, declining 0.2 percent and on course for its second weekly depreciation. The premium investors demand to hold emerging-market debt over U.S. Treasuries widened two basis points to 375, according to JPMorgan Chase & Co. indexes.

The ruble slid 1.8 percent to 61.4085 against the dollar, taking this year’s retreat to 8.8 percent. The yield on Russian bonds due August 2023 jumped 49 basis points to 16.2 percent. Fitch, which ranks Russia two levels above junk, is scheduled to make a ratings announcement today. Standard & Poor’s warned last month it may lower Russia to non investment grade.

Koruna Weakens

The Micex sank the most since Dec. 30, losing 3 percent as Lukoil fell 3.8 percent. Oil headed for a seventh weekly decline in New York and London amid speculation that OPEC won’t pare output to reduce a global surplus. Russia gets about 50 percent of budget revenue from oil and gas industries.

Hungary’s BUX Index and Poland’s WIG 20 declined 0.6 percent 0.3 percent, respectively, while Czech shares climbed for a second day.

The koruna slid as much 0.7 percent to 28.077 against the euro, the lowest level since March 2009, after data showed inflation slowed to 0.1 percent last month. The currency has fallen 1.2 percent this week, the most since the Czech National Bank intervened in the market in November 2013 to weaken the exchange rate and push inflation toward its 2 percent target.

The MSCI Emerging Markets Index has gained 0.4 percent this year and trades at 11.2 times projected 12-month earnings, data compiled by Bloomberg show. That compares with a multiple of 15.5 for the MSCI World Index, which has fallen 0.9 percent in 2015.

The Shanghai Composite Index slid 0.2 percent, erasing a gain of as much as 3.4 percent in the last half hour of trading, as traders weighed the prospect of stimulus. China’s producer prices slid for a record 34 months.

South Korea’s won strengthened 0.7 percent and the Indian rupee added 0.5 percent. The Philippine peso and Indonesian rupiah added at least 0.2 percent.