EMERGING MARKETS-Hawkish Fed, lower commodities weigh on emerging stocks, FX

  • Reuters
  • Stock Market News
EMERGING MARKETS-Hawkish Fed, lower commodities weigh on emerging stocks, FX
Credit: © Reuters.

By Karin Strohecker

LONDON, May 4 (Reuters) - Hawkish tones from the U.S. Federal Reserve, easing commodity prices and lacklustre Chinese data weighed on emerging market assets on Thursday with stocks extending losses for a second day and currencies weakening.

MSCI's emerging market index .MSCIEF fell 0.3 percent as bourses in much of Asia .HIS .STI .KLSE and Turkey .XU100 lost ground. Stocks in China .CSI300 .SSEC closed at a three-month low after a survey showed activity in services sector grew at its slowest in almost a year in April, raising concerns over economic risks. losses came after the Fed kept its benchmark interest rate steady as expected on Wednesday though downplayed weak first-quarter economic growth, emphasising labour market strength and signalling it was still on track for two more rate rises this year. investors expected this to be a temporary soft patch for many emerging assets, with markets closely watching key U.S. employment data out on Friday to show solid increases.

"U.S. dollar and U.S. Treasury yields (are) up post-FOMC but not convincingly so with futures almost 'fully' pricing in a June hike, leaving emerging market assets in a benign space of their own," said Simon Quijano-Evans, emerging market strategist at Legal & General Investment Management.

Russian stocks .IRTS .MCX bounced back from the previous days heavy losses when shares in Sistema AFKS.MM collapsed after oil major Rosneft ROSN.MM filed a $1.9 billion lawsuit against the business conglomerate. Sistema shares gained nearly 10 percent on Thursday.

South Korean stocks .KS11 hit a record high on robust exports, upbeat earnings and rising hopes for economic stimulus as the presidential election approaches. the dollar .DXY extending the previous session's gains, crude oil prices LCOc1 CLc1 trading near their weakest since late March and copper teetering near a four-month low weighed on currencies. O/R Africa's rand ZAR= fell 0.6 percent to its weakest in three weeks as data showed private sector activity contracted for the first time in nine months in April as new export orders continued to decline and growth remained marginal in Africa's most industrialised economy. rouble RUB= nearly matched those falls, weakening for a fourth straight session, while Turkey's lira TRY= slipped 0.2 percent.

In the Czech Republic, central bank policymakers were expected keep interest rates unchanged until 2018 as they concluded their first meeting since they lifted the cap on the Czech crown. no one expects the Bank to hike rates, the focus will be on the CNB's thinking on real economy developments, strength in the labour market in particular, and the fact that the exit from the FX regime has so far not resulted in a pronounced crown appreciation," Nomura's Henrik Gullberg wrote in a note to clients.

A Reuters poll showed that analysts expected the Czech crown to gain more than 4 percent against the euro in the coming year, lifted by economic growth and anticipated monetary tightening while shrugging off political uncertainty. dollar-denominated bonds came under pressure as protests against the government escalated further. Security forces battled protesters who lit fires and hurled stones on Wednesday in rage at President Nicolas Maduro's decree to create an alternative congress, with another fatality taking the death toll to 34 during a month of unrest. 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

Emerging Markets Prices from Reuters

Equities

Latest

Net Chg % Chg % Chg

on year

Morgan Stanley (NYSE: MS )

Emrg Mkt Indx .MSCIEF

983.27

-2.47 -0.25 +14.03

Czech Rep

.PX

1002.08

+5.79 +0.58 +8.73

Poland

.WIG20

2414.54 +22.45 +0.94 +23.95

Hungary

.BUX

32175.99 +98.27 +0.31 +0.54

Romania

.BETI

8238.22 +28.34 +0.35 +16.28

Greece

.ATG

754.32

+5.71 +0.76 +17.20

Russia

.IRTS

1100.03

+3.68 +0.34 -4.54

South Africa

.JTOPI 47005.63 +87.74 +0.19 +7.07

Turkey

.XU100 93587.82 -274.91 -0.29 +19.77

China

.SSEC

3127.29

-8.06 -0.26 +0.76

India

.BSESN 30136.67 +241.87 +0.81 +13.18

Currencies

Latest

Prev

Local

Local

close currency currency

% change % change

in 2017

Czech Rep

EURCZK=

26.78

26.74 -0.15

+0.85

Poland

EURPLN=

4.22

4.20 -0.30

+4.43

Hungary

EURHUF= 312.17

311.59 -0.19

-1.07

Romania

EURRON=

4.54

4.54 +0.02

-0.16

Serbia

EURRSD= 123.25

123.14 -0.09

+0.08

Russia

RUB=

57.61

57.36 -0.43

+6.34

Kazakhstan

KZT=

315.88

315.51 -0.12

+5.63

Ukraine

UAH=

26.47

26.47 -0.00

+2.00

South Africa ZAR=

13.50

13.43 -0.49

+1.72

Kenya

KES=

103.05

103.00 -0.05

-0.66

Israel

ILS=

3.62

3.62 +0.02

+6.47

Turkey

TRY=

3.54

3.53 -0.31

-0.51

China

CNY=

6.90

6.90 +0.02

+0.69

India

INR=

64.18

64.15 -0.05

+5.86

Brazil

BRL=

3.16

3.16 +0.03

+2.84

Mexico

MXN=

18.91

18.86 -0.27

+9.53

Debt

Index Strip Spd Chg %Rtn Index

Sov'gn Debt 11EML EMBIG 314

-2

.00 7 82.40 1

All data taken from Reuters at 08:53 GMT.

Currency percent change calculated from the daily U.S.

close at 2130 GMT.

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB )

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100