Emerging market stocks tick up, US-China fears cap sentiment

  • Reuters
  • Stock Market News
Emerging market stocks tick up, US-China fears cap sentiment
Credit: © Reuters.

* MSCI's EM stocks index edges up 0.1%

* U.S. considering sanctions on Chinese firm Hikvision - report

* Shanghai Composite and CSI 300 index each fall half a percent

* Turkish lira 0.5% softer, stocks 0.2% lower

By Aaron Saldanha

May 22 (Reuters) - Emerging market stocks marked time on Wednesday, as did developing world currencies against the dollar, with risk appetite capped by fears of an escalation in the U.S.-China trade dispute.

A report on Tuesday said the United States is considering Huawei-like sanctions on video surveillance firm Hikvision 002415.SZ , sending the firm's Shenzhen-listed shares 002415.SZ down 5.5% and deepening worries that trade friction between the world's top two economies could be further inflamed. Yuan Zhuang, chief analyst at Nordea Markets, wrote in a note that the prospect of a U.S.-China trade deal was weakened by the mistrust between the two nations, although a "cosmetic agreement is in the interests of both sides."

MSCI's developing world stocks index .MSCIEF consolidated gains from Tuesday's session, which lifted it off a more than four-month trough hit at the start of the week.

The Shanghai Composite .SSEC slid 0.5%, as did Chinese blue-chips .CSI300 .

Turkey's lira TRY= slid 0.5%, while its benchmark stocks index .XU100 dipped 0.2%, as losses among industrials outweighed gains in the communications services sector.

Turkish Defence Minister Hulusi Akar said late on Tuesday that while he sees an improvement in talks with the United States over the purchase of Russian S-400 defence systems and U.S. F-35 fighter jets, Ankara was also preparing for potential U.S. sanctions. rouble RUB= edged firmer, while stocks .IMOEX ticked up 0.1%.

South Africa's rand ZAR= was 0.1% firmer. Headline consumer inflation in Africa's most industrialised economy slowed to 4.4% year on year in April from 4.5% in March, data showed. country's central bank is due to review the repo rate on Thursday, with a Reuters poll predicting it will be left unchanged at 6.75%. stocks .JTOPI declined 0.4%. Sasol SOLJ.J slid 12.9% after the world's top maker of coal-derived motor fuel raised its cost estimate for a project in the United States by about $1 billion. in emerging Europe were broadly weaker against the euro, with the Polish zloty EURPLN= 0.1% softer.

Data for April showed Polish producer prices rose by 2.6% year-on-year, slightly above the 2.5% analysts polled by Reuters had expected.

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