EMERGING MARKETS-Emerging market stocks set for biggest weekly fall of year, Russia steadies
By Claire Milhench
LONDON, June 16 (Reuters) - Emerging market stocks were heading for their biggest weekly fall of the year on Friday, though Russia, one of the biggest losers of the week, steadied along with oil prices.
Russian stocks .MCX rose 0.6 percent off Thursday's 16-month lows, but are down 3 percent so far this week, their worst weekly performance since mid-April.
The rouble RUB= also firmed 0.2 percent against the dollar after dipping to one-month lows on Thursday, but was down over 1 percent this week.
The sell-off was triggered by U.S. lawmakers moving to impose new sanctions on Russia and force President Donald Trump to get the approval of Congress before easing any existing sanctions. price fall LCOc1 to six-month lows compounded Russia's woes. O/R
But as oil edged higher on Friday, the rouble found a floor, ahead of a Russian central bank meeting which is expected to cut interest rates by 50 basis points. reason we expect a 50 bps cut is inflation fell to their target in May, and so far signs from the first quarter are that domestic demand is still soft and they have room to cut," said Kiran Kowshik, a strategist at UniCredit.
"But it's possible they could do 25 bps given how oil is trading," he said, adding that either outcome was fine for the rouble due to the pace of disinflation.
MSCI's emerging markets stocks index .MSCIEF was steady near three-week lows hit on Thursday with gains in some European markets such as Hungary .BUX and Poland .WIG20 offsetting earlier losses in Asia.
Chinese mainland shares .CSI300 fell 0.3 percent, ending the week down 1.6 percent, the first weekly fall since early May as weak producer inflation and investment data have reinforced concerns of a renewed slowdown in the world's No.2 economy.
The yuan CNY= was set for its worst week since early-March, after the central bank fixed its official guidance sharply lower Kong stocks .HSI closed slightly up but have lost 1.6 percent for the week, their biggest fall in three months.
Kowshik said that as fiscal stimulus promised by U.S. President Donald Trump had been delayed, there had been some selling in emerging assets that would have benefited from such extra spending.
He cited South Korea, where the won fell as much as 1.2 percent KRW= before the central bank was suspected of intervening. The won ended at five-week lows. Federal Reserve signals that it may begin reducing its holdings of bonds and other securities this year is also a negative for emerging markets bad news for emerging markets is the Fed tapering announcement, which many people were not expecting this week," Kowshik said. "It suggests there is a limit to how much U.S. yields can fall."
The Turkish lira TRY= weakened 0.2 percent against the dollar. The central bank left its key interest rate on hold on Thursday, despite high inflation. Africa was closed for a public holiday but stocks .JTOPI ended the week down almost 3 percent, their worst performance since December.
Mining stocks sold off hard on Thursday when the government revamped the sector's ownership rules. central Europe, the Romanian leu reached a near five-year low against the euro EURRON= after the ruling coalition said it would seek to topple Prime Minister Sorin Grindeanu next week. the Serbian dinar EURRSD= hovered near a 17-month high hit on Thursday after the president nominated Ana Brnabic as the country's first woman prime minister. She is not affiliated with any party.
For GRAPHIC on emerging market FX performance 2017, see http://tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2017, see http://tmsnrt.rs/2dZbdP5
For CENTRAL EUROPE market report, see CEE/
For TURKISH market report, see .IS
For RUSSIAN market report, see RU/RUB ) Emerging Markets Prices from Reuters
Equities
Latest
Net Chg % Chg % Chg
on year
Morgan Stanley (NYSE: MS )
Emrg Mkt Indx .MSCIEF 1003.66
+0.02 +0.00 +16.40
Czech Rep
1000.82
+4.08 +0.41 +8.59
Poland
2302.66
+6.67 +0.29 +18.21
Hungary
35692.03 +157.53 +0.44 +11.53
Romania
8427.80 +21.51 +0.26 +18.95
Greece
809.47
+9.74 +1.22 +25.76
Russia
998.64
+6.68 +0.67 -13.34
South Africa
.JTOPI 44512.15 -572.71 -1.27 +1.39
Turkey
.XU100 98766.28 +29.26 +0.03 +26.40
China
3122.86
-9.62 -0.31 +0.62
India
.BSESN 31119.49 +43.76 +0.14 +16.87
Currencies
Latest
Prev
Local
Local
close currency currency
% change % change
in 2017
Czech Rep
EURCZK=
26.21
26.24 +0.10
+3.03
Poland
EURPLN=
4.22
4.23 +0.24
+4.39
Hungary
EURHUF= 307.63
307.79 +0.05
+0.39
Romania
EURRON=
4.58
4.58 +0.08
-0.97
Serbia
EURRSD= 121.97
122.07 +0.08
+1.13
Russia
RUB=
57.74
57.85 +0.19
+6.11
Kazakhstan
KZT=
320.26
317.86 -0.75
+4.18
Ukraine
26.02
26.01 -0.04
+3.77
South Africa ZAR=
12.83
12.86 +0.25
+7.00
Kenya
KES=
103.45
103.30 -0.14
-1.04
Israel
ILS=
3.53
3.53 -0.04
+9.19
Turkey
TRY=
3.52
3.51 -0.16
+0.26
China
CNY=
6.81
6.81 -0.11
+1.89
India
INR=
64.49
64.54 +0.09
+5.36
Brazil
3.27
3.27 +0.00
-0.64
Mexico
17.99
18.05 +0.33 +15.17
Debt
Index Strip Spd Chg %Rtn Index
Sov'gn Debt 11EML EMBIG 321
-1
.01 7 90.67 1
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