EMERGING MARKETS-Stocks extend losses on trade, economic worries; currencies weaken

  • Reuters
  • Stock Market News
EMERGING MARKETS-Stocks extend losses on trade, economic worries; currencies weaken
Credit: © Reuters.

* Sino-U.S. tensions, global economic worries lift safe-haven dlr

* MSCI EM stocks index cuts losses; Turkey, S.Africa, Russia up

* Falling oil prices weigh on Russia's rouble

* GDP data eyed: S.Africa due on Tuesday, Russia on Wed

By Susan Mathew

Sept 7 (Reuters) - Emerging market currencies weakened on Monday with eyes this week on GDP data from Russia and South Africa, while a strong open for western European bourses helped an index of developing market shares cut some losses after a weak handover from Asia.

A pull-back on Wall Street on Friday, mixed trade data from China, and fears of an escalation in U.S.-China tensions after news of potential U.S. sanctions against China's biggest chipmaker SMIC 0981.HK , pushed MSCI's index of EM shares .MSCIEF to a fourth straight session of losses.

But the index partially recovered from a fall of 0.6% as stock indexes in Turkey .XU100 , South Africa .JTOPI , Russia .IMOEX , Hungary .BUX and Poland .WIG20 , all rose between 0.2% and 0.1%, tracking a near 1% gain in Europe's STOXX 600 .STOXX . .EU

"It is essential to see continued improvement in economic data and an end to the (coronavirus) pandemic for sustainable upside in risk assets," said Hussein Sayed, chief market strategist at FXTM.

Volumes remained thin due to an U.S. holiday.

Against a stronger dollar, South Africa's rand ZAR= was flat despite fresh data showing net foreign exchange reserves rose in August. The second-quarter gross domestic product data, due on Tuesday, is expected to show the already recession-hit economy likely suffered its deepest-ever contraction following a strict coronavirus lockdown. FRX/

A return of nationwide power cuts last week by state utility Eskom and signs of tension inside the ruling African National Congress have seen the rand lag its emerging market peers.

A fall in oil prices following price cuts by Saudi Arabia added to the pressure for petro-linked currencies, with Russia's rouble RUB= softening 0.3%. GDP data due on Wednesday is expected to show Russia's economy held its ground in the April-June quarter.

Turkey's lira TRY= eased 0.2%, just shy of new lows. President Tayyip Erdogan told European Council President Charles Michel on Sunday that the EU's stance towards the East Mediterranean would be a test of its sincerity, calling on it to take an impartial stance in Turkey's row with Greece.

In Belarus, data showed gold and foreign exchange reserves fell by $1.4 billion to $7.5 billion in August due to central bank efforts of propping up the rouble BYR= amid widespread protests in the country last month against the disputed election of leader Alexander Lukashenko. bonds were mixed, while the currency traded flat to higher.

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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