Emerging market stock gains

Emerging markets rose in tandem with developed markets on Friday, with investors taking note of better-than-expected US corporate results and economic data. US government data showed durable goods orders slipped in March, but fell far less than Wall Street forecast while the inventory of new US homes for sale plummeted in March, bringing a glimmer of hope for future improvement in the critical sector of the economy.
MSCI's emerging markets stock index rose 1.46 percent, up 0.88 percent for the week, while the MSCI Latin American stock index gained 2.77 percent, pulling itself up to a gain of 1.21 percent on the week. In the credit markets, emerging sovereign debt spreads over US Treasuries narrowed by 8 basis points to 554 basis points over weaker US Treasuries.
According to the J.P. Morgan Emerging Markets Bond Index Plus. ING's Spegel as well as other analysts and credit traders said there was no direct impact on market prices from an outbreak of a new strain of flu in Mexico and parts of the United States.
The new strain has killed as many as 61 people in Mexico. It has sickened 8 in the United States but all recovered, health officials said. Mexico confirmed 20 deaths were directly linked to the new strain. Mexico's peso weakened 1 percent to 13.33 per US dollar, hit by a wave of profit taking after rising more than 1 percent in early trad. Brazil's real rose 1.28 percent to 2.1910 against the US dollar.
A draft communique obtained by Reuters says finance chiefs from the Group of Seven nations meeting in Washington see the pace of economic decline slowing and will make a pledge to cleanup banks' bad assets in order to restore the flow of credit. For emerging market nations, most of whom were not caught up in the high-leverage credit game that blew up in developed market banks, the fallout from the financial crisis has pulled their economies and markets down.
At the Group of 20 meeting in London earlier this month, the decision to triple the funds available to the International Monetary Fund with a specific focus on helping emerging markets has been one reason risk appetite has grown in recent weeks. The director of the IMF's Western Hemisphere Department, Nicolas Eyzaguirre, said Latin American countries have healthier banks and solid fiscal positions that will enable them to emerge from the global economic crisis quickly and in good shape.