EMERGING MARKETS-Emerging market stocks dip, S.African rand soft ahead of rate meet

Published 2019/01/17, 11:51
Updated 2019/01/17, 12:00
© Reuters.  EMERGING MARKETS-Emerging market stocks dip, S.African rand soft ahead of rate meet

* Russian rouble dips, stocks flat as oil falls

* Turkish lira eases after Wednesday gain

By Aaron Saldanha

Jan 17 (Reuters) - Emerging market stocks slid off a more than six-week peak on Thursday amid cautious risk sentiment among investors, while developing world currencies weakened against a resolute dollar, losing all ground gained over the past two days.

Emerging market equities from China .SSEC and Hong Kong .HSI to South Africa .JTOPI dipped, while South Africa's rand ZAR= softened ahead of a central bank meeting where borrowing costs are unlikely to be tweaked.

MSCI's indexes of developing world stocks .MSCIEF and emerging market currencies .MIEM00000CUS each dipped 0.1 percent. Weakness prevailed in China as local stocks dipped and seasonal support from corporate demand for the Chinese yuan faded. .SS CNY/

"Cautious market participants are still weighing in on emerging markets," said Bianca Botes, corporate treasury manager at Peregrine, adding that continued strong U.S. jobs data could boost the dollar.

The rand was 0.2 percent softer, on pace to slip for the first time in six sessions. The South African Reserve Bank was expected to leave its key rate unchanged on Thursday, according to all 27 economists polled by Reuters, after having raised it to 6.75 percent in November. African stocks .JTOPI dropped 1 percent. Retailer Mr Price Group Ltd MRPJ.J led the losses, shedding 13.4 percent after posting slower sales growth for the third quarter. rouble RUB= eased, backing away from an over one-month high hit on Thursday. A 0.6 percent fall in prices of oil LCOc1 , a key Russian export, tempered gains among local equities .IMOEX .

Moscow-listed shares of aluminium giant Rusal RUAL.MM rose 3.5 percent after the U.S. Senate on Wednesday rejected legislation to keep sanctions on firms linked to Russian oligarch Oleg Deripaska. lira TRY= eased half a percent, giving back a chunk of Wednesday's 2.1 percent gain, which came after the Turkish central bank (CBT) kept borrowing costs intact and issued an outlook deemed to be hawkish. had expected CBT's language to move in a dovish direction - indeed, there were forecasters predicting a rate cut already yesterday based on similar expectations - but this did not happen," Commerzbank (DE:CBKG) analysts said in a note.

The lira's strength on Wednesday, its best day in close to two weeks, was attributed to expectations of a more hawkish CBT stance, the analysts said.

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