Emerging-Market Stocks Gain on Korea Bailout, Money Markets

By Laura Cochrane

Oct. 20 (Bloomberg) -- Emerging-market stocks rose for the first time in four days and bonds increased, after South Korea's government announced Asia's largest bank rescue package and money-market rates in the region dropped.

The MSCI Emerging Markets Index climbed 2.7 percent to 583.05 at 8:16 a.m. in London, rebounding from a three-day, 16 percent drop. Russia's Micex Index advanced 3.1 percent and Turkey's benchmark ISE National 100 Index rose 1.8 percent.

South Korea's Kospi Index increased 2.3 percent after the government said it will pour as much as $130 billion into its financial industry to unlock lending, joining the U.S., Europe, Japan and Australia in shoring up banks. Hong Kong's three- month interbank lending rate tumbled the most in 10 years after the city's Monetary Authority injected HK$4 billion ($515 million).

The extra yield investors demand to own developing nations' bonds instead of U.S. Treasuries fell 10 basis points to 6.19 percentage points, the lowest since Oct. 15, according to JPMorgan Chase & Co.'s EMBI+ Index.

India's Sensex Index added 4.3 percent to 10,402.41 and the CSI 300 benchmark in China rose 3.5 percent to 1,896.73.

To contact the reporter on this story: Laura Cochrane in London at lcochrane3@bloomberg.net