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By Bloomberg

Emerging-market stocks and currencies rose for a second day as speculation mounted that the Federal Reserve won’t be forced to raise U.S. interest rates soon amid recent data showing weaker-than-forecast economic growth.

The shekel rose for a second day as Israeli voters went to the polls to elect a prime minister and governing coalition. Turkey’s lira climbed 0.6 percent against the dollar amid signs that government pressure for deeper rate cuts is easing. The ruble extended the biggest advance in emerging markets in the past month as Russian tax-payment deadlines outweighed a drop in crude prices. Chinese equities rose to the highest level since 2008.

The MSCI Emerging Markets Index added 0.9 percent to 949.06. The Fed starts a two-day policy meeting today after gauges of U.S. manufacturing and industrial production trailed estimates, tempering the outlook for higher interest rates and bolstering demand for riskier assets.

There’s some expectation that weaker-than-expected U.S. data “could cause the Federal Reserve Open Market Committee to be a bit more cautious,” Michael Wang, a strategist at Amiya Capital LLP in London, said by e-mail. “A weaker U.S. dollar and stronger expectations of China policy easing” are boosting the appetite for developing-country assets, he said.

China’s benchmark measure extended this year’s rally to 8.3 percent and interest-rate swaps dropped the most in six weeks after the central bank took extra steps to boost liquidity to cushion an economy grappling with capital outflows and slowing growth. The yuan is the only emerging-market currency besides the ruble to strengthen against the dollar in the past month.

Currency Rebound

A gauge of 20 developing-nation currencies, which fell to a record as recently as March 13, climbed 0.3 percent. Speculation the Federal Reserve may speed up rate cuts has damped appetite for emerging-market assets this year, sending the valuation of the main equity measure to the cheapest level versus the MSCI World Index since 2006.

The shekel strengthened 0.1 percent against the dollar, pushing its two-day gain to 0.9 percent. Exit polls showed that the race between Prime Minister Benjamin Netanyahu and rival Isaac Herzog was too close to call. The stalemate raised the prospect of weeks of negotiations to form a coalition.

The ruble climbed 1.2 percent to 61.45 per dollar and the dollar-denominated RTS Index gained 1.2 percent. Russian companies will pay about 1.3 trillion rubles in taxes this month, with the heftiest payments due March 25, according to a survey of five economists conducted by Bloomberg.

Turkish Rates

Turkey’s lira appreciated for a second day. Turkiye Garanti advanced 3.2 percent, leading the Borsa Istanbul 100 Index’s 2.4 percent gain. Policy makers kept benchmark borrowing costs at 7.50 percent, as predicted by 15 of 19 economists in a Bloomberg survey.

Central bank Governor Erdem Basci, who has come under criticism from the government for not cutting interest rates fast enough, briefed President Recep Tayyip Erdogan on monetary policy on March 11. Erdogan said he refrained from publicly urging the governor to lower borrowing costs.

The real climbed 0.3 percent from a 12-year low as the Ibovespa rallied the most in two months. Lenders including Banco Bradesco SA and Itau Unibanco Holding SA rallied on speculation the banking industry is better prepared to withstand a period of lower growth in Brazil.

All 10 industry groups in the emerging-markets stock index increased, paced by industrial stocks. Samsung Electronics Co. led the climb on the broader index, pushing South Korea’s Kospi index to its steepest advance in 20 months.

The premium investors demand to own emerging-market debt over U.S. Treasuries widened four basis points to 381 basis points, according to JPMorgan Chase & Co. indexes.

China Railway Construction and China Railway Group Ltd. rose at least 2.3 percent in Hong Kong. The government is studying a merger of the two companies, the China Economic Weekly said on its website, citing Wang Mengshu, deputy chief engineer at China Railway Tunnel Group.