By Karin Strohecker
LONDON, June 6 (Reuters) - Emerging stocks inched lower and currencies softened on Tuesday, as lower oil and commodity prices and political tensions over a rift between Qatar and fellow Arab nations dampened risk appetite.
MSCI's emerging market equity benchmark .MSCIEF snapped a three-day winning streak to fall 0.2 percent, with bourses weakening in Asia .KS11 .TWII , Africa .JTOPI and emerging Europe .IRTS .XU100 .BUX .
Currencies were also on their back foot with commodity markets under pressure. Iron ore markets suffered and copper prices CMCU3 dipped for a third straight session, weighed down by concerns over slowing growth in China and the United States. the bigger picture view, emerging markets just have to grapple with the new normal, China's growth is half of what it used to be, that is impacting oil, copper and iron ore," said Win Thin, global head of emerging market currency strategy at BBH.
"The Gulf countries worry about oil, and so does Latin America. Africa is worrying about iron ore and copper."
Oil prices LCUc1 took another leg lower, now firmly below the $50 per barrel threshold as the rift between Qatar and leading Arab powers fuelled concerns that an OPEC-led push to tighten crude markets looked increasingly frail while soaring U.S. output added to the woes. O/R
A number of Arab powers - including Saudi Arabia, Egypt, the United Arab Emirates and Bahrain - severed diplomatic relations with Qatar, accusing Doha of support for Islamist militants and Iran, reopening some old festering wounds. rift saw Qatar stocks and eurobonds tumble .QSI and the cost of insuring its debt against default rise. The Qatari riyal, which is pegged to the dollar, weakened against the U.S. currency in spot and forward markets. ahead it really depends on Qatar and Saudi Arabia getting together and sorting this out, otherwise you can see repercussions not only for oil but also for countries like Turkey," said Simon Quijano-Evans, emerging markets strategist at Legal & General Investment Management.
"There are just too many fires out there at the moment, which need to be quenched," he added.
"The assumption will be that the pegs continue to hold but it's another part of that matrix that becomes uncertain."
South Africa's rand ZAR= snapped a four-day winning streak to weaken 0.6 percent against the dollar.
Turkey's lira TRY= extended losses for a second day, slipping 0.5 percent, while Mexico's peso MXN= retreated after jumping nearly 2 percent on Monday, after the governing party clinched a key seat in a state election. China's yuan CNY= firmed against the dollar after the official midpoint was fixed at a near-seven-month high, shrugging off the central bank's massive $73 billion cash injection into the financial system to ensure liquidity.
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
Net Chg % Chg % Chg
Morgan Stanley (NYSE: MS )
Emrg Mkt Indx .MSCIEF 1015.15
-2.44 -0.24 +17.73
-3.51 -0.35 +8.98
2286.06 +10.05 +0.44 +17.36
34946.29 -204.15 -0.58 +9.20
8665.47 -103.94 -1.19 +22.31
-3.01 -0.38 +21.74
-3.97 -0.38 -9.72
.JTOPI 46141.40 -300.67 -0.65 +5.10
.XU100 98008.55 -183.42 -0.19 +25.43
3102.33 +10.68 +0.35 -0.04
.BSESN 31219.26 -90.23 -0.29 +17.25
close currency currency
% change % change
South Africa ZAR=
18.34 -0.20 +12.76
Index Strip Spd Chg %Rtn Index
Sov'gn Debt 11EML EMBIG 320
.02 7 91.07 1
All data taken from Reuters at 09:08 GMT.
Currency percent change calculated from the daily U.S.
close at 2130 GMT.
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