London: Emerging-market stocks and currencies rallied, posting their biggest weekly gains this year, as a surge in US hiring eased concern that global economic growth is faltering and the real jumped on bets that support is growing for the impeachment of Brazil’s president.

Brazil’s stocks led world gains and Petroleo Brasileiro SA jumped 9.9 per cent after the arrest of a former president fuelled speculation that a move to remove President Dilma Rousseff will gain momentum. The currencies in Colombia and Chile each gained at least 1 per cent. Indian stocks capped the largest weekly increase since December 2011 as Finance Minister Arun Jaitley pledged to keep next year’s budget deficit within 3.5 per cent of gross domestic product. Russian bonds rallied to the highest since 2014.

Brent crude’s rebound from a 12-year low in January is helping boost sentiment toward developing countries, many of which rely on raw-material exports. A Bloomberg gauge of commodity prices rose to a two-month high on Friday. US employers added 242,000 workers in February, versus a median forecast of 195,000 in a Bloomberg survey. Chinese leaders are expected to use this weekend’s National People’s Congress to temper depreciation bets for the yuan.

The jobs report “strengthens people’s convictions that the global economy can still rely on the US consumer,” said Koon Chow, a strategist at Union Bancaire Privee Ubp SA in London. “That, in turn, provides some good will for key emerging-market drivers such as commodity prices.”

Currency advance

A gauge of 20 developing-nation currencies climbed 0.8 per cent, extending a weekly advance to 3 per cent, the most since the period ended October 9. The MSCI Emerging Markets Index gained 1.4 per cent to 790.97, pushing this week’s advance to 6.9 per cent. A gauge of developing-nation bonds fell from a 11-month high.

Brazil’s real jumped 6.6 per cent this week, the most on a closing basis since 2008. Former President Luiz Inacio Lula da Silva is the highest-profile figure targeted so far in a corruption probe that has rocked Latin America’s largest country and is drawing closer to its Centre of power. The currency gained the most among major world peers in the five days through Friday.

The rupiah strengthened 0.8 per cent to bring its five-day increase to 2 per cent, and South Africa’s rand and the Turkish lira each gained more than 3 per cent on the week.

Stock valuations

The onshore yuan strengthened 0.5 per cent this week in Shanghai. Chinese leaders will probably refrain from announcing any detailed changes to the country’s yuan policy this year at the congress to avoid spurring further volatility, according to Oversea-Chinese Banking Corp.

This week’s rally raised the average valuation of companies on the MSCI Emerging Markets Index to 11.6 times projected 12-month earnings, the highest since July. That compares with a multiple of 15.7 for developed-nation equities, which have retreated 3.3 per cent in 2016.

Energy shares have steered the gains in developing nations, rising 11 per cent since the end of last week as Brent crude rallied 10 per cent to $38.72 (Dh142.10) a barrel. The Bloomberg Commodity Index increased 3.9 per cent.

Brazil rally

Brazilian stocks entered a bull market on Thursday as a news report that a senator alleged wrongdoing by the ruling party also added to optimism that Rousseff’s ouster is gaining momentum. The Ibovespa jumped 4 per cent Friday as Petrobras rallied to the highest level since Dec. 16. The benchmark stock gauge gained 18 per cent this week.

India’s S&P BSE Sensex Index advanced 6.4 per cent this week, while the Hang Seng China Enterprises measure in Hong Kong climbed 6.5 per cent. Foreign funds have pumped more than $2.6 billion into Korean, Taiwanese, Indian and Thai equities this week, according to data compiled by Bloomberg.

A JPMorgan Chase & Co emerging-market bond index climbed 1 per cent this week to 725.04 as of Thursday, the highest level since April 29.

Russian government bonds rallied, pushing yields on five- year notes to the lowest level since September 2014, as slowing inflation and the strengthening rouble bolstered expectations the central bank will cut borrowing costs this month.