Stocks in developing countries advanced for a sixth day, erasing the MSCI Emerging Markets Index's 2008 loss, as record-breaking rallies in oil, coal and soybeans boosted equities from Rio de Janeiro to Moscow. Gerdau SA, PT Bumi Resources and OAO Lukoil led the rebound as rising global demand and the falling dollar pushed oil above $127 a barrel. Stocks in Brazil, Taiwan and Russia have propelled the index, which lost as much as 16% this year, to within 7.5%age points of a record.

“As long as we're seeing strong commodity prices, the implication is that the emerging markets are still growing,'' said Walter Hellwig, who helps oversee $30 billion at Morgan Asset Management in Birmingham, Alabama. ”The supply constraints in commodities are here for at least several more years, so these stocks should continue to do well.'' Stocks in countries from Mexico to Israel and Korea dropped as much as 22% from its Oct. 29 peak as increasing bank losses and tightening credit standards threatened to slow economic expansion throughout the world. Energy and raw-material producers gained 33% and 36% since the Jan. 22 low.