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By Bloomberg

Emerging-market stocks rose for a second day and currencies gained after the Federal Reserve signaled the pace of U.S. interest-rate increases will be more gradual than anticipated.

Equities in Turkey and India climbed at least 1.1 percent. Malaysia’s ringgit led the advance in emerging currencies and Russia’s ruble climbed to a two-week high. China’s stocks headed for the biggest weekly loss since 2009 as share sales drained cash from the market.

The MSCI Emerging Markets Index rose 0.7 percent to 976.18 at 10:56 a.m. in London, set for the steepest gain in a month, while a gauge tracking 20 developing-country currencies added 0.4 percent. New forecasts issued by the Federal Open Market Committee committee implied two quarter-point rate rises this year but a slower pace in 2016. The revised outlook eased concern that a rapid increase in U.S. borrowing costs will reduce demand for riskier assets.

“The new Fed forecasts are helping emerging-market currencies and equities a bit today as the new ‘dot plot’ suggests a more gradual pace of Fed tightening,” Michael Wang, a London-based strategist at Amiya Capital LLP, said by e-mail. “The Fed is data dependent, so if the data picks up again then this could change.”

Gradual Increase

Fed Chair Janet Yellen said the date of the first rate increase is less important than the trajectory of subsequent ones. She said tightening would be “gradual,” and that the bank wouldn’t follow a “mechanical” formula.

The developing-nation gauge has risen 2.1 percent this year and trades at 11.9 times projected 12-month earnings, data compiled by Bloomberg show. The MSCI World Index has gained 3.4 percent and is valued at a multiple of 16.4.

Walsin Lihwa Corp. jumped 10 percent in Taipei, the most since December 1993 and the biggest gainer in the emerging- markets index, after saying it plans a share buyback.

Nine of 10 industry groups rose, led by health-care and consumer-staple companies. China Resources Enterprise Ltd. jumped 8.2 percent in Hong Kong after the brewer said it will increase a special dividend as its parent offered HK$2 billion ($258 million) more to buy its assets than initially agreed.

Winning Streak

Turkey’s Borsa Istanbul 100 Index gained for a third day, adding 1.1 percent. Russia’s dollar-denominated RTS Index jumped 2 percent and the Micex Index advanced 0.2 percent, led by Polyus Gold International Ltd.

The metal extended advances, with futures climbing the most in five weeks.

Benchmark stock indexes in Hungary and the Czech Republic fell 1.3 percent as Chancellor Angela Merkel offered no concessions on a deal with Greece in a speech Thursday.

The Shanghai Composite Index dropped 3.7 percent, taking a decrease this week to 7.4 percent. Hong Kong’s Hang Seng China Enterprises Index slipped 0.2 percent.

Analysts are increasingly warning the stock market is in a bubble that will burst after the gauge more than doubled in the past 12 months to reach its highest levels in seven years. Initial public offerings this week will lure about 6.7 trillion yuan ($1.1 trillion) of bids, according to a Bloomberg survey.

The premium investors demand to own emerging-market debt over U.S. Treasuries widened two basis points to 362, according to a JPMorgan Chase & Co. index.