EMERGING MARKETS-Emerging stocks make modest gains after factory data

  • Reuters
  • Stock Market News
EMERGING MARKETS-Emerging stocks make modest gains after factory data
Credit: © Reuters.

By Claire Milhench

LONDON, July 3 (Reuters) - Robust manufacturing data from China and South Korea boosted emerging equities on Monday, while currencies were kept under pressure by a firmer dollar and higher U.S. yields that also capped share market gains.

China's manufacturing sector expanded at the fastest pace in three months while South Korea's grew for the first time in 11 months. emerging Europe, Turkish manufacturing activity expanded at its quickest in more than three-and-a-half years whilst Poland and Russia also continued to accelerate. prices also rose, inching up to a two-week high LCOc1 .

"Data flow from the PMIs have been quite solid," Manik Narain, emerging FX strategist at UBS, said, referring to Purchasing Managers Indexes. "Between the commodities and the tech cycle, emerging market equities have held up quite well."

MSCI's benchmark emerging stocks index .MSCIEF rose 0.2 percent, with Polish .WIG20 and Turkish .XU100 stocks up 0.3 percent, while Russian stocks

Chinese mainland shares delivered a mixed performance .CSI300 .SSEC but Hong Kong .HSI was supported by financials, the biggest beneficiary of a new Bond Connect scheme that links China's $9 trillion bond market with overseas investors. stocks rose almost 1 percent .BSESN .NSEI after tobacco manufacturer ITC ITC.NX jumped nearly 10 percent to a record high.

Taxation for cigarettes under a new goods and services levy is around 5-6 percent lower than under the previous structure. the dollar firming 0.3 percent .DXY against a basket of currencies and U.S. 10-year yields at six-week highs, emerging currencies struggled to make headway, with the South Korean won KRW= weakening 0.2 percent and the Indian rupee INR= down 0.3 percent.

South Africa's rand ZAR= slipped 0.4 percent, extending losses to a third straight session. A no-confidence vote in President Jacob Zuma has been delayed to Aug 8. Minister Malusi Gigaba said he would present an action plan on Friday to boost economic growth, drawing on issues raised by investors and ratings agencies. lira TRY= fell 0.2 percent after Turkish consumer inflation dipped in June. sharper-than-expected fall in Turkish inflation last month to 10.9 percent year-on-year raises the risk that the central bank will begin to reverse its recent tightening cycle sooner than we had previously anticipated," analysts at Capital Economics said in a note.

The Czech crown EURCZK= firmed to its strongest against the euro since the central bank abandoned its weak crown policy in early April. Czech employment growth accelerated to its strongest since March. assets steadied after Saudi Arabia and its allies gave Doha two more days to comply with a list of demands in an ongoing diplomatic crisis. stocks .QSI rose 0.3 percent after dipping to the lowest since January 2016 on Sunday. Its five-year credit default swaps were quoted at 121 basis points (bps) by IHS Markit, after touching 123 bps on Friday, a 16-month high. 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

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