EMERGING MARKETS-Currencies weaken, stocks subdued in light holiday trading

  • Reuters
  • Stock Market News
EMERGING MARKETS-Currencies weaken, stocks subdued in light holiday trading
Credit: © Reuters.

* Chinese markets shut all week for Lunar New Year

* India's rupee falls on higher oil prices

* Turkey's lira slips as inflation climbs in January

By Agamoni Ghosh

Feb 4 (Reuters) - A strong dollar, rising oil prices and U.S. Treasury yields holding on to recent gains put pressure on emerging markets on Monday, with currencies falling and stocks subdued.

MSCI's index for developing-world currencies .MIEM00000CUS extended losses. The dollar gained after stronger-than-expected U.S. jobs and manufacturing reports on Friday, although a dovish outlook from the Federal Reserve was still holding it down.

MSCI's index for emerging market stocks .MSCIEF was down 0.2 percent, led by losses in South Africa .JTOPI and India .BSESN .NSEI . China and South Korea were shut for the Lunar New Year holiday; Hong Kong .HSI shares rose on a half-trading day.

India's rupee INR= fell to eight-week lows as oil prices rose to 2019 highs on OPEC-led supply cuts and U.S. sanctions against Venezuela.

A central bank meeting later in the week was expected to leave Indian interest rates unchanged. Economists had predicted rates would start rising next quarter, but that changed after Governor Urjit Patel's sudden resignation from the Reserve Bank of India and his replacement by Shaktikanta Das. will be the first RBI meeting under Das, who being a former government official, will be cognisant of any political pressure to ease," Mitul Kotecha, senior emerging markets strategist at TD Securities, said in a note.

"While there is a non-insignificant risk of a rate cut under the new governor, we think it may be premature for RBI to ease at this time," he said.

Turkey's lira TRY= slipped 0.2 percent after data showed annual inflation crept up to 20.35 percent in January. Poor weather drove food prices higher and kept up the pressure for tight monetary policy. Africa's rand ZAR= slipped further away from six-month highs as investors took profits from the previous week's rally. .J

Russia's rouble RUB= fell, under pressure from foreign currency purchases by the central bank, but the MOEX index in Moscow .IMOEX was among the few stock markets charting gains. Energy shares gained as oil prices rose. RU/RUB

In emerging Europe, Romania's leu RON= slipped lower after data showed producer prices for December 2018 were lower than expected. TOP NEWS across emerging markets CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB

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