(Bloomberg) -- The iShares MSCI Emerging Markets Index exchange-traded fund advanced for a second day as factory output data in the euro-area and the U.S. climbed. OAO Gazprom jumped the most in a month amid an increase in crude oil.

The developing-nation ETF rose 0.7% to $41.22. The MSCI Emerging Markets Index retreated less than 0.1% to 990.40. Gazprom led gains in Russia’s Micex Index as a rally in oil boosted appetite for equities in the world’s largest energy exporter. Brazil’s Ibovespa climbed from a 15-week low as Gafisa SA led homebuilder stocks higher. Ukrainian bonds advanced on speculation the nation’s government may receive as much as $15 billion in loans from Russia to shore up its finances.

Stocks joined a global rally after data showed euro-area factory output jumped to a 31-month high, while industrial production in the U.S. climbed by the most in a year. Federal Reserve policy makers start a two-day meeting tomorrow and economists see an increased chance policy makers will begin reducing stimulus. Crude oil jumped after Libyan rebels refused to hand over control of three oil ports to the government.

“It’s good news out of Europe and the follow through in the U.S. that’s pulling emerging-market stocks up,” Paul Zemsky, the head of multi-asset strategies at ING U.S. Investment Management, which oversees $190 billion, said by phone from New York. “People are getting more comfortable that the Fed is going to do something over the next two months. So fear around that is abating a bit.”

Price Swings

The MSCI Emerging Markets Index trades at 10.1 times projected earnings, compared with the valuation of 14.3 for the MSCI World Index. The Chicago Board Options Exchange Emerging Markets ETFVolatility Index, a measure of options prices on the fund and expectations of price swings, gained 0.2% to 25.38.

Brazil’s Ibovespa rallied on speculation the central bank will end borrowing cost increases that pushed Brazil’s benchmark rate up the most in the world this year. Gafisa added 3.5%, while Itau Unibanco Holding SA, Latin America’s biggest lender by market value, climbed after its board of directors approved a plan to buy back shares.

Russian shares rose for a second day as Gazprom jumped 2.2%. Ukraine’s sovereign dollar notes due June 2014 advanced to $96.755 at 6:54 p.m. in Kiev, reducing the yield 1.78 percentage point to a three-week low of 15.48 percent. The Budapest Stock Exchange Index rallied the most in a month as OTP Bank Nyrt., Hungary’s largest lender, jumped after the supreme court ruled against voiding $17 billion of foreign-currency mortgage loans.

China, India

The Shanghai Composite Index dropped the most in a month as an unexpected decline in a manufacturing index heightened concern growth is decelerating. Jiangxi Copper Co. and Aluminum Corp. of China Ltd. led declines for material producers. SAIC Motor Corp. slumped more than 5 percent to drag down automakers after the city of Tianjin said it would limit issuance of car license plates. Bank of China Ltd. dropped the most in three months after benchmark money-market rates jumped.

India’s benchmark stock index fell for a fifth day after the wholesale inflation rate was faster than economists estimated, spurring concern the central bank may increase borrowing costs. Mahindra & Mahindra Ltd., the nation’s largest maker of sport-utility vehicles and tractors, tumbled the most in four months. GlaxoSmithKline Pharmaceuticals Ltd. jumped the most in two decades to a record after its parent offered to increase its stake.

South Korea’s government bonds rose, pushing the three-year yield to a one-month low, as investors sought safer assets before the Federal Reserve reviews its unprecedented stimulus. The won gained.

The premium investors demand to own emerging-market debt over U.S. Treasuries fell three basis points, or 0.03 percentage point, to 319 basis points, according to JPMorgan Chase & Co.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.