Emerging-market stocks pared their worst weekly drop since 2012 and currencies rebounded after China moved to stabilize the yuan and suspended a controversial circuit-breaker system that sparked a selloff in Chinese shares that had spread throughout developing nations.
Energy shares rebounded with oil as the MSCI Emerging Markets Index climbed from a six-year low.
The Shanghai Composite Index rallied after people familiar with the matter said state-controlled funds bought equities.
Hong Kong’s Hang Seng China Enterprises Index halted a four-day drop. The yuan rose in onshore trading and a gauge of developing-nation currencies increased from a record low, led by Malaysia’s ringgit.
The MSCI Emerging Markets Index climbed 0.5 percent at 8:07am in London, paring losses this week to 6.5 percent. Its 14-day relative-strength index fell to 22.4 on Thursday, below the level of 30 that some analysts see as a signal a market is set to rebound. The gauge is trading at 10.6 times its projected 12-month earnings, compared with 14.9 for the MSCI World Index, which has fallen 5.2 percent this week.
Nine out of 10 industry groups in the developing-nations index gained, led by energy stocks.
The Hang Seng China Enterprises measure rose 1.1 percent, after sliding to the lowest level since October 2011 on Thursday.
The Shanghai Composite added 2 percent, paring its weekly decline to 10 percent, still its biggest loss since August last year.
State-controlled funds purchased Chinese stocks on Friday, focusing on financial shares and others with large weightings in benchmark indexes, according to people familiar with the matter.
The CSI 300 Index of large-cap companies in Shanghai and Shenzhen advanced 2 percent.
While China’s high concentration of individual investors makes its stock market notoriously volatile, the extreme swings this year have revived concerns over the Chinese Communist Party’s ability to manage an economy set to grow at the weakest pace since 1990.
The TAIEX rose 0.53 percent on Friday to close at 7,893.97, down from 8,338.06 on Dec. 31.
Thai shares rose 1.5 percent, while equity indexes in Turkey, South Africa, South Korea and India advanced at least 0.5 percent. Vietnamese and Philippine gauges retreated.
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