Emerging Markets Hit 8 Month Highs on Growth Outlook

“Emerging-market stocks rose, lifting the main index to an eight-month high, as the World Bankraised its East Asia growth outlook, business confidence in Germany improved and investors anticipated a U.S. budget deal.

New World Resources NV (NWR), the Czech Republic’s largest coal producer, headed for its highest close in almost four months, helping the country’s benchmark PX Index post its longest rally since 2009. OAO Severstal, the steelmaker controlled by billionaire Alexey Mordashov, was set for its longest winning streak since Sept. 12 in Moscow. The zloty reached its strongest level in 10 weeks as a second monthly improvement in German business confidence spurred expectations that Poland’s biggest export market can withstand the euro area’s recession.

The MSCI Emerging Markets Index (MXEF) added 0.6 percent to 1,052.30 as of 12:49 p.m. in London, heading for the highest close since April 3. Developing nations in East Asia will probably grow 7.5 percent this year, compared with a previous 7.2 percent forecast, contributing about 40 percent of global growth, the World Bank said in a report today. House Speaker John Boehneroffered a backup plan that would raise tax rates for Americans making more than $1 million a year, as he seeks compromise between fellow Republicans and the government.

“It’s the rally that we usually get at the start of the new year coming early,” Michael Wang, anemerging-markets strategist at Amiya Capital LLP in London, said by email. “There is optimism that we’re close to an agreement in the fiscal cliff negotiations.”

Russia, Brazil

The 21 countries in the emerging-markets index send about 17 percent of their exports to the U.S., according to data compiled by the World Trade Organization.”