EMERGING MARKETS-Surging oil prices lift rouble, most EM stocks bounce

  • Reuters
  • Stock Market News
EMERGING MARKETS-Surging oil prices lift rouble, most EM stocks bounce
Credit: © Reuters.

* Russian rouble up 1%

* Trump talks up truce hopes of Saudi-Russia oil price war

* Investors pull out $83.3 billion from EM stocks, bonds in March

* EM stocks rise 1%, U.S. stocks futures up

* U.S. weekly jobless claims data awaited

By Susan Mathew

April 2 (Reuters) - Soaring oil prices lifted currencies of crude exporters including Russia's rouble and Mexico's peso on Thursday, while stocks in emerging markets gained after a weak performance in the last session.

Russia's rouble RUB= led gains among major emerging markets peers, up 1%, as oil prices soared after U.S. President Donald Trump raised hopes of a truce between Russia and Saudi Arabia regarding oil prices. prices had crashed last month after Saudi engaged in a price war with Russia, hammering the rouble as well currencies of Mexico MXN= and Colombia COP= . O/R

"After the comments over the last couple of days it does look possible that there will some kind of agreement, if not output cuts at least limitations and verbal interventions that will prevent Saudi Arabia from completely flooding markets," said Per Hammarlund, chief EM strategist at SEB, Stockholm.

Most other developing world currencies .MIEM00000CUS also rose as the dollar weakened slightly against a basket of currencies .DXY . FRX/

South Africa's rand ZAR= rose 0.2% but stayed near all-time lows hit in the last session, as investors worried about the weak economy's ability to take the toll of the pandemic. .J

Turkey's lira TRY= crept higher, recovering from its lowest in almost two years.

The currency has fared slightly better than its peers this year as a recovering economy and lower oil prices bode well for the importer. But rising number of COVID-19 cases has dented sentiment of late and analysts are also worried about decreasing foreign exchange reserves as the central bank intervenes to stabilize markets. .IS

Emerging markets have suffered a "sudden stop" in capital flows in March with portfolio investors pulling a record $83.3 billion from stocks and bonds, the Institute of International Finance said. dismal manufacturing data from around the world had knocked sentiment on Wednesday, U.S. weekly jobless claims data due later in the day will be the next to measure impact on growth. Last week, claims had jumped to 3.3 million from 282,000 in the week before. a moderate decline (or increase) in the manufacturing PMI index in March masks a potentially much more severe contraction in the coming months," said Alexey Pogorelov, an analyst with Credit Suisse (SIX: CSGN ).

The World Health Organization, World Bank and International Monetary Fund are calling for debt relief to help developing countries, the WHO chief said on Wednesday. U.S. stocks future moved higher after a rout on Wall Street overnight, most EM stocks .MSCIEF rose. Some Asian bourses gave up early losses to turn positive .MIAPJ0000PUS , while those in Turkey .XU100 , South Africa .JTOPI , Russia .IMOEX and Hungary .BUX rose between 0.2% and 1.7%. .N

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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