EMERGING MARKETS-Emerging stocks at 10-month trough; rupee, forint hit record lows

  • Reuters
  • Stock Market News
EMERGING MARKETS-Emerging stocks at 10-month trough; rupee, forint hit record lows
Credit: © Reuters.

By Claire Milhench

LONDON, June 28 (Reuters) - Emerging equities fell to a 10-month trough on Thursday and the Indian rupee and Hungarian forint dropped to record lows as worries about a global trade war hit demand for riskier assets.

MSCI's benchmark emerging stocks index .MSCIEF fell as much as 1 percent and is down almost 7 percent in June, its worst monthly loss since August 2015.

Asia's export-oriented markets saw hefty losses once again. So did emerging Europe and South Africa once Europe opened, with currencies taking a pasting.

Hungary's forint weakened 0.2 percent to touch an all-time low against the euro EURHUF= and India's rupee INR= fell 0.5 percent to a record low against the dollar. rupiah IDR= tumbled 1.5 percent to its lowest since October 2015 and South Africa's rand ZAR=D3 hit a seven-month low. Indonesia's central bank said it continued to intervene in the markets to try to stabilise the rupiah the latest trade development, U.S. President Donald Trump said he would use a strengthened national security review process to thwart Chinese acquisitions of sensitive U.S. technologies commerce ministry responded that it was opposed to using national security as grounds to restrict foreign investments slowdown in emerging-market growth since January had compounded the risk-off move stemming from trade concerns, said Per Hammarlund, the chief emerging markets strategist at SEB. "Without that,it wouldn't have been quite as severe," he said.

"You have this in the background, and then you add Trump's threats on trade and most emerging markets are very dependent on trade. A lot of countries are exporting to China, and they become collateral damage whether or not Trump intended to target them."

China's yuan CNY= fell 0.4 percent to its weakest since November. It has lost some 3.3 percent in June, more than in any other month since 1994, when China unified the market exchange rate. Depreciation of the currency will help offset some of the damage to the competitiveness of Chinese exports as a result of tariffs imposed by the United States.

In a sign of the growing investor concern about the economic impact of a trade war, China's five-year credit default swaps rose to 73 basis points, according to IHS Markit data, the highest since early June 2017 also warned late on Wednesday that the strengthening of the U.S. dollar since mid-April had increased the credit risk of several emerging markets as their currencies depreciated the stocks side, the biggest declines included Indonesian .JKSE shares, down 2 percent to their lowest in more than a year, and tech-heavy South Korea .KS11 , down 1.2 percent.

Chinese mainland shares .CSI300 fell 1.06 percent to 13-month lows and Philippines stocks .PSI , the worst performer in the region year-to-date, fell 1.5 percent.

Among the few positive performers was Turkey's lira TRY= , which rose 0.2 percent. It reversed early falls after reports that President Tayyip Erdogan and his government alliance partner had agreed not to extend emergency rule when the current three-month period expires in July state of emergency has been in place since an attempted coup in July 2016, but Hammarlund said the new executive presidency gave Erdogan almost the same powers as under the emergency laws: "It wouldn't surprise me as he can manage without it now."

For 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 1043.23

-8.89 -0.84 -9.95

Czech Rep

.PX

1053.27

+1.55 +0.15 -2.31

Poland

.WIG20

2135.58

-7.67 -0.36 -13.23

Hungary

.BUX

35547.37 -40.09 -0.11 -9.73

Romania

.BETI

7935.57

-5.42 -0.07 +2.35

Greece

.ATG

756.96 -10.95 -1.43 -5.66

Russia

.IRTS

1124.93

+0.09 +0.01 -2.56

South Africa

.JTOPI 49631.26 +301.66 +0.61 -5.52

Turkey

.XU100 96284.01 +329.21 +0.34 -16.52

China

.SSEC

2785.98 -27.20 -0.97 -15.76

India

.BSESN 35091.58 -125.53 -0.36 +3.04

Currencies

Latest

Prev

Local

Local

close currency currency

% change % change

in 2018

Czech Rep

EURCZK=

26.02

25.92 -0.38

-1.90

Poland

EURPLN=

4.36

4.35 -0.10

-4.13

Hungary

EURHUF= 327.87

327.32 -0.17

-5.29

Romania

EURRON=

4.65

4.65 -0.08

+0.48

Serbia

EURRSD= 117.87

117.91 +0.03

+0.45

Russia

RUB=

63.22

63.19 -0.06

-8.80

Kazakhstan

KZT=

341.66

341.06 -0.18

-2.59

Ukraine

UAH=

26.29

26.29 -0.00

+7.06

South Africa ZAR=

13.86

13.85 -0.10 -10.87

Kenya

KES=

101.00

101.00 +0.00

+2.08

Israel

ILS=

3.65

3.65 -0.02

-4.65

Turkey

TRY=

4.61

4.62 +0.20 -17.82

China

CNY=

6.63

6.60 -0.40

-1.80

India

INR=

68.96

68.63 -0.48

-7.44

Brazil

BRL=

3.86

3.86 +0.04 -14.22

Mexico

MXN=

20.15

20.18 +0.15

-2.48

Debt

Index Strip Spd Chg %Rtn Index

Sov'gn Debt 11EML EMBIG 389

1

.06 7 64.77 1

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