EMERGING MARKETS-Stocks eye best day in three weeks on Powell's dovish comments
* Tech-heavy bourses lead gains
* Currencies mixed despite weaker dollar
By Sruthi Shankar
Feb 25 (Reuters) - Emerging market shares were on course to record their best day in three weeks on Thursday, tracking gains in global equities, with bourses in South Korea, Taiwan and South Africa jumping on hopes that global borrowing costs will remain lower for longer.
MSCI's benchmark EM stocks index, which spans 27 countries, gained 1.4%, after falling 5% from its all-time high over the past week.
South Korea's KOSPI .KS11 jumped 3.5%, lifted by semiconductor heavyweights, while bourses in Taiwan .TWII , Hong Kong .HSI , South Africa .JTOPI and Turkey .XU100 all gained more than 1%.
Russia's rouble-denominated MOEX index .IMOEX lagged its peers, rising 0.7%, but a Reuters poll showed the market will hit all-time highs this year, boosted by strong commodity prices, record low interest rates and a business activity surge. stocks climbed as U.S. Federal Reserve Chair Jerome Powell reiterated on Wednesday that the central bank would not tighten policy until the economy is clearly improving, and will look through any near-term spike in inflation. assume the bull run is likely to continue for Q1 and Q2, but not necessarily in a straight line," Hussein Sayed, chief market strategist at FXTM wrote in a note.
"Despite the assurances from Chair Powell, equity investors will need to keep a close eye on long-term yields."
While stock markets showed relief, government bond yields globally continued to climb on expectations of rising inflation amid prospects of more U.S. fiscal stimulus. US/
JPMorgan (NYSE: JPM ) cut its emerging forex exposure to "marketweight" from "overweight" on Wednesday, saying a sooner-than-expected rise in U.S. 10-year real yields will put pressure on some emerging market assets. world currencies were mixed despite the dollar weakening against its major peers.
The South African rand ZAR= gave back all of its gains made after the government on Wednesday released its annual budget, which assured some investors that the country could avoid a full fiscal crisis. currency fell 1.3% against the dollar, with credit ratings agency Fitch saying the country still faced "severe challenges" to implementing fiscal consolidation. Turkish lira TRY= headed lower for a fourth day, as data showed economic confidence index slipped 0.5% month-on-month in February, as pandemic fallout continues to weigh. peso MXN= dropped almost 1% as Moody's warned that the country's fiscal deficit will likely widen to 4.1% of gross domestic product this year, with ongoing support for ailing state oil company Pemex driving up debt. GRAPHIC on emerging market FX performance in 2021, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2021, 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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