By Justin Carrigan Feb. 22 (Bloomberg) -- High-yielding currencies rose, led by the South Korean won, and emerging-market stocks rallied on speculation Federal Reserve Chairman Ben S. Bernanke may signal that U.S. interest rates will stay near record lows. The won was the biggest gainer against both the yen and the dollar, increasing 1.1 percent against the U.S. currency at 7:01 a.m. in New York, and the New Zealand dollar strengthened. The MSCI Emerging-Markets Index advanced for the first time in three days, while Europe’s Dow Jones Stoxx 600 Index was little changed and futures on the Standard & Poor’s 500 Index climbed 0.4 percent. Copper fell. Bernanke may tell Congress Feb. 24 that last week’s increase in the discount rate isn’t intended to drive up borrowing costs amid a weak jobs market. Taiwan and Thailand exited recessions in the fourth quarter, expanding 9.2 percent and 5.8 percent respectively, government reports showed today. “There are a few positive things for the market to grab hold of this morning, and that’s resulted in a correction at the expense of the dollar and the yen,” said Ian Stannard, a foreign-exchange strategist at BNP Paribas SA in London. The won rose the most in almost seven weeks as sales at South Korea’s largest department stores increased in January for an 11th month. Korea’s Kospi stock index climbed 2.1 percent and Taiwan’s Taiex Index gained 1.6 percent, helping lift the MSCI Emerging Markets Index 1.3 percent. Hungary’s BUX Index rose 1.4 percent after an economic-sentiment gauge advanced to the highest level in 17 months. Japan, China The MSCI Asia Pacific Index advanced 2.5 percent, its biggest gain since November. Suruga Bank Ltd. rallied 7.4 percent in Tokyo on stock-buyback plans. Hong Kong’s Hang Seng Index jumped 2.4 percent, led by real-estate developers after Sun Hung Kai Properties Ltd. won the city’s first land auction for the year. The Shanghai Composite Index fell 0.5 percent on the first day of trading after a weeklong break. Reliance Industries Ltd. dropped 0.5 percent in Mumbai. The owner of the world’s largest oil-refining complex raised its offer for bankrupt LyondellBasell Industries AF to about $14.5 billion, according to two people with knowledge of the offer. European stocks fluctuated between gains and losses, with retailers and automakers declining. Inditex SA, the world’s biggest owner of clothing stores, fell 2 percent in Madrid after Exane BNP Paribas downgraded the shares. Bank of Ireland Plc slumped 6.8 percent in Dublin. The country’s biggest lender by market value said it will give the Irish government a stake of almost 16 percent instead of a dividend. Allied Irish Banks Plc slid 3.6 percent. U.S. Futures The gain in U.S. futures indicated the S&P 500 may advance for fifth straight day. Bernanke will probably assure Congress that the Fed is mindful of the lack of job growth in the U.S. and an increase in the benchmark interest rate isn’t imminent. The central bank chief will deliver his semi-annual report on the economy to House and Senate panels Feb. 24-25. Smith International Inc. rose 12 percent in German trading after Schlumberger Ltd., the world’s largest oilfield-services provider, agreed to buy the company for $11 billion. Greek stocks and bonds climbed on optimism the nation will be able to find funding as it struggles to narrow a budget deficit that is more than four times the European Union limit. The ASE Index advanced for a third day, gaining 1.8 percent, and the yield on the government two-year note declined 11 basis points to 5.43 percent. Credit-Default Swaps Credit-default swaps on the Markit iTraxx Crossover Index of 50 European companies with mostly high-yield ratings dropped 16 basis points to an almost three-week low of 452, according to JPMorgan Chase & Co. prices. The index is a benchmark for the cost of protecting bonds against default and a decline signals improvement in perceptions of credit quality. Treasuries fell, with the yield on the 10-year note rising 1 basis point to 3.78 percent. The U.S. government will sell a record $126 billion of securities this week, starting with $8 billion of 30-year inflation-protected bonds today. Copper for delivery in three months fell 0.6 percent to $7,385 a metric ton on the London Metal Exchange, the first decline in three days. Nickel and zinc also retreated. Gold for immediate delivery added 0.4 percent to $1,123.70 an ounce, for a third gain. Crude oil for March delivery, which expires later today, was unchanged at $79.90 a barrel on the New York Mercantile Exchange. To contact the reporter on this story: Justin Carrigan in London at jcarrigan@bloomberg.net

Source