EMERGING MARKETS-Stocks end 9-day winning streak; Turkish central bank decision due

  • Reuters
  • Stock Market News
EMERGING MARKETS-Stocks end 9-day winning streak; Turkish central bank decision due
Credit: © Reuters.

* MSCI EM index slides 0.9%

* Turkish lira steady; central bank decision due at 1100 GMT

By Susan Mathew

Feb 18 (Reuters) - Emerging-market stocks broke their longest winning streak since June on Thursday as concerns about spreading variants of the coronavirus gave investors an opportunity to cash in, while Turkey's lira was muted ahead of a central bank meeting.

MSCI's index of EM stocks .MSCIEF fell 0.9% after gaining 4% over the last nine sessions, when optimism around vaccine rollouts and stimulus measures buoyed sentiment.

But many countries are seeing rising spreads of the UK, Brazil and South African variants, increasing fears of more lockdowns that would threaten reviving business activity. was a sea of red .MIAPJ0000PUS led by tech stocks, although the Shanghai composite .SSEC and Taiwan shares .TWII outperformed. In South Africa, shares .JTOPI were set for their worst day in three weeks. Turkish .XU100 and Russian shares .IMOEX managed to gain.

Turkey's lira TRY= was up 0.07%. Policy makers are expected to keep the key interest rate at 17% though a minority expects a hike to 18%. The decision is due at 1100 GMT. lira declined 20% last year, pushing inflation higher through imports denominated in hard currencies. Annual inflation climbed more than expected to some 15% last month, leading individuals to snatch up foreign currencies and gold.

"Turkish inflation dynamics continue to be disastrous," said Tatha Ghose at Commerzbank (DE: CBKG ), who predicts policy makers will hold.

"Still, in Turkey, a different rationale works – CBT's monetary policy has to be a much trickier balancing act. It also happens to be pandemic times, when even in other countries, monetary policy in support of economic recovery is now part of the political landscape."

Raising hopes for a pick-up in business activity, President Tayyip Erdogan said Turkey will begin a gradual return to normal life from COVID-19-induced curbs on a province-by-province basis from March. rouble RUB= RUBUTSTN=MCX was steady with an upward bias as oil prices remained buoyed by a deep freeze in Texas. South Africa's rand ZAR= made slight moves.

"Market attention is likely to increasingly focus on the fiscal risks again, as (South Africa's) Finance Minister Tito Mboweni will present his new projections on the budget deficit and debt levels next week," said Commerzbank's Elisabeth Andreae.

"The strains caused by the pandemic suggest that new highs can be expected which in turn means that we might see rating downgrades. The prospects for the rand are not good."

For GRAPHIC on emerging market FX performance 2020, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance 2020, see https://tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB

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