Surprise index signals emerging market stocks rally may have more legs

The surprise index has tended to be a leading indicator for the performance of developing-nation equities

The rally in emerging-market stocks from their sell-off in March may have more room if an indicator of economic momentum is any guide.

The economic surprise index for developing nations compiled by Citigroup jumped to a two-year high on Monday as global production started to gather pace again due to the rolling back of coronavirus lockdowns. 

The Citigroup gauge — which measures whether recent data have surpassed or fallen short of economists’ forecasts — climbed to 28.5, from as low as minus 41.2 on March 16.