EMERGING MARKETS-Commodity rally lifts emerging stocks to 3-week high

  • Reuters
  • Stock Market News
EMERGING MARKETS-Commodity rally lifts emerging stocks to 3-week high
Credit: © Reuters.

By Claire Milhench

LONDON, April 19 (Reuters) - A commodities rally helped lift emerging market stocks to a three-week peak on Thursday after Saudi Arabia was reported to be seeking oil prices as high as $100 a barrel, but Turkey's lira slipped after stellar gains in the previous session.

MSCI's .MSCIEF benchmark emerging equities index rose 0.8 percent, extending gains into a third day, led by resources firms after the broad Commodity Research Bureau (CRB) index of commodity prices touched its highest level since July 2015. .TRCCRBTR

Wednesday's 1.8 percent rise was the biggest one-day jump in the CRB in eight months. Aluminium prices are up 30 percent so far in April and nickel has jumped 20 percent this week alone.

However, some of those gains in aluminium prices were due to a supply squeeze after U.S. sanctions on major Russian producer Rusal 0486.HK , with similar worries also spurring nickel. prices LCOc1 rose 1.2 percent to over $74 a barrel, highs not seen since late 2014, after a report that top crude exporter Saudi Arabia was seeking a price rise to as high as $100 a barrel, suggesting no change in a supply-cutting deal. O/R Saudi bourse .TASI jumped 1.4 percent to its highest since August 2015, while Qatar .QSI rose 1.05 percent to 2-1/2 month highs. Other commodity producers also benefited, with South Africa shares up 0.4 percent to near one-month highs and Russian stocks .IMOEX up 0.3 percent to 10-day highs.

Earlier in Asia, Chinese mainland .CSI300 and Hong Kong .HSI stocks gained around 1.2 percent, boosted by gains in materials and energy firms. Beijing said it was well prepared to handle any negative effects from a trade dispute with the United States delivered a more mixed performance, with the Kazakhstan tenge KZT= firming 0.8 percent, but the Russian rouble RUB= weakened 0.3 percent.

Ratings agency Moody's said Russia's strong public and external finances would shield its economy from the impact of the latest U.S. sanctions. But it also warned the sanctions would be credit-negative for some Russian debt issuers, especially Rusal. lira TRY= was among the worst performers, slipping 0.8 percent after gaining 2.1 percent in the previous session, its biggest one-day gain in more than a year. The surge came after President Tayyip Erdogan announced early elections for June 24. Turkish sovereign dollar bonds extended Wednesday's gains with the January 2041 issue US900123BJ84=TE trading at around a one-month high according to Tradeweb. Turkish five-year credit default swaps held at 195 basis points, according to IHS Markit, a near two-week low.

"The authorities want to see the lira stable ahead of that election and a pre-requisite for that is tighter monetary settings," said Kiran Kowshik, a strategist at UniCredit. "The market is pricing that in. If they did a 100 basis points hike or above that, it would be short-term positive for the lira."

He said the rally might go on for a few weeks yet, with the lira potentially breaking through the 4 per dollar mark in the next few days. But to get through the key level of 3.94-3.95, the central bank would need to deliver, he added.

The Mexican peso also slipped 0.6 percent MXN= , with leftist Andres Manuel Lopez Obrador widening his lead in the race for the July 1 presidential election, opening up a gap of 22 percentage points, according to a poll. GRAPHIC on emerging market FX performance 2018, see http://tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2018, see http://tmsnrt.rs/2dZbdP5

For TOP NEWS across emerging markets 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 1185.52

+9.38 +0.80 +2.34

Czech Rep

.PX

1128.92

-0.06 -0.01 +4.71

Poland

.WIG20

2334.86 +19.36 +0.84 -5.13

Hungary

.BUX

38694.08 -72.41 -0.19 -1.74

Romania

.BETI

8948.25 +14.79 +0.17 +15.41

Greece

.ATG

840.91

-1.43 -0.17 +4.80

Russia

.IRTS

1159.51

+4.96 +0.43 +0.44

South Africa

.JTOPI 51316.91 +291.11 +0.57 -2.31

Turkey

.XU100 11946.79 -152.23 -0.14 -2.94

China

.SSEC

3117.55 +26.15 +0.85 -5.73

India

.BSESN 34410.99 +79.31 +0.23 +1.04

Currencies

Latest

Prev

Local

Local

close currency currency

% change % change

in 2018

Czech Rep

EURCZK=

25.32

25.30 -0.10

+0.82

Poland

EURPLN=

4.17

4.16 -0.07

+0.24

Hungary

EURHUF= 310.33

310.18 -0.05

+0.06

Romania

EURRON=

4.66

4.65 -0.11

+0.47

Serbia

EURRSD= 118.02

118.08 +0.05

+0.32

Russia

RUB=

61.01

60.86 -0.25

-5.50

Kazakhstan

KZT=

325.51

328.11 +0.80

+2.24

Ukraine

UAH=

26.22

26.14 -0.31

+7.34

South Africa ZAR=

11.96

11.92 -0.33

+3.28

Kenya

KES=

100.25

100.30 +0.05

+2.84

Israel

ILS=

3.51

3.51 -0.01

-0.97

Turkey

TRY=

4.04

4.01 -0.78

-6.19

China

CNY=

6.28

6.27 -0.10

+3.63

India

INR=

65.76

65.71 -0.08

-2.93

Brazil

BRL=

3.38

3.38 -0.01

-2.02

Mexico

MXN=

18.22

18.09 -0.72

+7.86

Debt

Index Strip Spd Chg %Rtn Index

Sov'gn Debt 11EML EMBIG 313

-2

.03 7 93.54 1

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