By Sujata Rao
LONDON, Sept 29 (Reuters) - Emerging stocks rose 0.6 percent on Thursday, led by energy-heavy Gulf and Russian bourses, though Saudi markets lagged and Indian assets sold off after New Delhi said it launched a strike on suspected militants based in Pakistan.
OPEC energy producers' unexpected decision to cap oil output spurred a 6 percent jump in crude futures LCOc1 on Wednesday, and while details of the cuts were sparse, MSCI's emerging equity index rose to six-day highs .MSCIEF .
The Malaysian ringgit rose 0.4 percent to a one-week high MYR= , while the Russian rouble inched to the highest in almost two months against the dollar RUB .
But Saudi stocks slipped 0.4 percent .TASI , failing to recoup recent losses that took them to eight-month lows after the government unveiled a raft of sweeping austerity measures.
The market was also rattled by a U.S. Congress vote to overturn a presidential veto of a law that would allow victims of the Sept. 11 attacks to sue Riyadh.
The riyal fell versus the dollar in forward markets, with one-year forwards touching two-month lows SAR1Y= after the U.S. Congress overturned President Barack Obama's veto on legislation allowing 9-11 victims to sue the Saudi government. Tuvey, Middle East economist at Capital Economics, said the OPEC decision could lead to short-term market gains but was not "a game changer". Nor did he see the Saudi developments as sparking devaluation concerns.
"Fears about a Saudi devaluation have come down a lot in the past few months. The government seems to be going hard and fast on the austerity front so that's how they will adjust to lower oil prices," Tuvey said.
Indian stocks meanwhile fell as much as 2 percent at one point .NSEI after New Delhi said it launched strikes on militants it suspects of preparing to infiltrate the part of Kashmir it controls. The Indian rupee fell almost 1 percent against the dollar INR= .
Credit default swaps (CDS) for the State Bank of India, often used as a proxy for the sovereign -- did not move on the day though they have risen 15 basis points (bps) in the past two weeks to 158 bps, according to Markit.
Turkish markets stayed weak, with the lira down half a percent against the dollar and stocks falling 0.3 percent TRY= .XU100 as more signs emerged of economic stress. The tourism ministry said the number of foreigners visiting Turkey had dropped 38 percent in August on a year-on-year basis.
It was the fourth consecutive month that tourist numbers dropped more than 30 percent and raises fears for the country's current account deficit. South Africa too, the rand was half a percent weaker ZAR= . Data showed credit growth slowing to a below-forecast 6.15 percent year-on-year in August, underscoring the stubborn slowdown in the economy. in Africa, the Egyptian pound traded just off record lows hit on Wednesday in the six-month and three-month non-deliverable forward (NDF) market, as investors priced a devaluation linked to the likely approval of an International Monetary Fund bailout (IMF).
Polish stocks slipped a quarter percent .WIG20 as the ruling party tightened its grip on economic policy with a government reshuffle.
The Czech crown firmed in three-month forward markets against the euro EURCZK3M= ahead of a central bank meeting that could provide some clues as to when authorities could scrap the crown's exchange rate cap.
Markets are now looking ahead to the Mexican central bank meeting that is expected to deliver a 50 bps rate rise. The peso was 0.3 percent weaker, just off two-week highs MXN= .
For GRAPHIC on emerging market FX performance 2016, see http://link.reuters.com/jus35t
For GRAPHIC on MSCI emerging index performance 2016, see http://link.reuters.com/weh36s
For GRAPHIC on MSCI emerging Europe performance 2016, see http://link.reuters.com/jun28s
For GRAPHIC on MSCI frontier index performance 2016, see http://link.reuters.com/zyh97s
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
+5.34 +0.59 +15.54
+9.94 +1.15 -8.37
-4.75 -0.27 -6.96
27908.95 +432.55 +1.57 +16.67
6993.55 +46.62 +0.67 -0.15
+4.57 +0.81 -10.08
998.03 +22.72 +2.33 +31.83
.JTOPI 45950.38 +716.12 +1.58 +0.33
.XU100 77345.51 -332.27 -0.43 +7.83
2998.23 +10.38 +0.35 -15.28
.BSESN 27905.21 -387.60 -1.37 +6.84
close currency currency
% change % change
63.04 -0.44 +15.20
South Africa ZAR=
13.61 -0.55 +12.98
3.22 +0.02 +23.15
19.37 -0.23 -11.54
Index Strip Spd Chg %Rtn Index
Sov'gn Debt 11EML EMBIG 361
.07 7 71.37 1
All data taken from Reuters at 08:50 GMT.
Currency percent change calculated from the daily U.S. close at 2130 GMT.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.