Emerging-market stocks rise to six-month high vs S&P 500

• MSCI Index hands 19% excess returns over S&P 500 since October
• China reopening, weaker dollar key reasons for outperformance

Emerging-market stocks extended their lead over US shares in the early days of the new year, with the equity benchmark rising to a six-month high against the S&P 500 Index.

The MSCI Emerging Markets Index has advanced 3% this week, compared with a 0.8% decline in the US gauge, continuing a turnaround that began in recent months following its worst annual losses since the 2008 global financial crisis. China’s reopening, a softer dollar, and signs of easing global inflation have been spurring gains, leading the gauge to rise Friday for a fourth day to its highest since August.

Emerging-market stocks make `significant breakout'

Emerging-market stocks show enough strength to suggest their rally this year isn’t just a bounce, according to Ryan Detrick, a senior market strategist at LPL Financial Research. Detrick cited the ratio between the MSCI Emerging Markets and S&P 500 indexes, which rose this month to its highest reading since July 2015, in a blog posting Monday. The gauge’s “significant breakout” favors emerging markets, Detrick wrote, along with faster earnings growth and relatively low valuations. The MSCI index added 26 percent for the year through Wednesday.