By Claire Milhench
LONDON, July 5 (Reuters) - Emerging stocks fell for a fourth straight session on Thursday as a deadline neared for Washington to impose tariffs on $34 billion of Chinese goods, with Beijing set to retaliate in kind.
MSCI's benchmark emerging equity index was down 0.3 percent, reflecting growing fears the tit-for-tat tariffs will hit exporters in other countries as the World Trade Organization warned the effects were already starting to show. has made clear that tariffs on U.S. goods will take effect immediately after the U.S. duties kick in. quite a bearish global market environment," said Koon Chow, an emerging markets strategist at UBP. "There are concerns about global growth given the increase in trade tensions ... manifesting in punishment of currencies or countries that are open and do a lot of trade with the U.S. and China."
Asian markets took much of the heat with Hong Kong shares .HSI down 0.7 percent at October lows, while Chinese mainland shares .SSEC slid 0.9 percent and the yuan CNY= retreated a touch. The yuan rose sharply against the dollar earlier in the week after China's central bank moved to calm the market. shares .TWII fell 1 percent and South Korea stocks slipped 0.4 percent .KS11 to 14-month lows.
Philippines stocks .PSI shed 1.5 percent as inflation there quickened to its highest in more than five years, opening the door for a third rate hike this year. of emerging Europe opened stronger, however, with Turkish stocks .XU100 up 0.8 percent and Russia shares .IMOEX up 0.5 percent.
RESPITE FOR SOME CURRENCIES
BNP Paribas (PA: BNPP ) Asset Management said it was continuing to look for opportunities to add long EM FX exposure: "Our view on EM remains constructive. We believe that market participants have now discounted most of the bad news and that there are now more elements for positive rebound," it said in a note.
The Turkish lira TRY= stabilised after coming under sustained selling earlier in the week when consumer price inflation jumped to a 14-year high. This increased expectations the central bank will have to raise rates again. prime minister said bringing down inflation and interest rates was a top priority. Chow put the chances of another Turkish rate hike at 50/50. "Now we are post-election, keeping the exchange rate stable is less important from a political standpoint and yields are already high enough to slow the economy down – adding another 100 basis points won't make much difference," he said.
In emerging Europe, Hungary's forint EURHUF= firmed 0.4 percent against the euro to a two-week high, rebounding from a record low hit in recent days.
Sentiment has improved on expectations that the central bank in Budapest, which moved away from its ultra-loose stance in its rhetoric last month, is working on plans to tackle inflation.
The zloty traded flat EURPLN= . Political tensions between Poland and the European Union have resurfaced after legislation came into force requiring a third of Supreme Court judges in Poland to retire. 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
Net Chg % Chg % Chg
Morgan Stanley (NYSE: MS )
Emrg Mkt Indx .MSCIEF 1052.65
-3.42 -0.32 -9.13
+1.54 +0.14 -0.06
-5.70 -0.26 -11.56
36567.95 -32.30 -0.09 -7.13
7817.64 -82.35 -1.04 +0.82
-0.36 -0.05 -7.27
+5.80 +0.51 -0.10
.JTOPI 51568.68 +194.39 +0.38 -1.84
.XU100 98005.17 +775.10 +0.80 -15.02
2733.98 -25.15 -0.91 -17.33
.BSESN 35598.77 -46.63 -0.13 +4.53
close currency currency
% change % change
South Africa ZAR=
4.67 +0.23 -18.60
3.91 +0.02 -15.35
Index Strip Spd Chg %Rtn Index
Sov'gn Debt 11EML EMBIG 383
.10 7 68.80 1
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