EMERGING MARKETS-Global growth optimism lifts emerging stocks to new multi-year high

  • Reuters
  • Stock Market News
EMERGING MARKETS-Global growth optimism lifts emerging stocks to new multi-year high
Credit: © Reuters.

By Karin Strohecker

LONDON, Jan 23 (Reuters) - Buoyed by a strong lead from Wall Street and the end of the U.S. government shutdown, emerging stocks rose 1 percent on Tuesday to near-decade highs, though currencies were mixed, with the rand retreating from 2-1/2-year highs.

MSCI's emerging equity benchmark .MSCIEF extended gains for an eighth session - the longest winning streak since July with heavyweight Hong Kong .HSI up 1.6 percent to hit record highs and South Korea .KS11 hot on the heels with tech and consumer stocks racing higher.

Across emerging Europe, stocks in Budapest .BUX and Warsaw .WIG scaled new peaks while bourses in South Africa .JTOPI , Turkey .XU100 and Russia .IRTS all advanced.

The gains came after U.S. senators struck a deal to end a three-day government shutdown, sending Wall Street's main indexes to record highs. equity markets have been on a tear over the past year, buoyed by a synchronised uptick in global economic growth and emerging markets bolstered by continued low borrowing rates.

The International Monetary Fund upped its global growth forecasts for 2018 and 2019, including for China, helping to support bullish sentiment has continued to grow at a very strong pace - there were very few signs of a slowdown in the fourth quarter, and that has driven up commodities and sentiment," said Per Hammarlund at SEB in Stockholm.

Fresh money flowing into investment funds had "combined to give this very positive sentiment at the beginning of the year," he added.

Emerging currencies were hit by a rise in the dollar .DXY

South Africa's rand ZAR= and Turkey's lira TRY= weakened 0.5 percent against the greenback, but the losses followed solid gains on Monday, when the rand hit a 2-1/2 year high on hopes scandal-tarnished President Jacob Zuma would be forced out.

Mexico's peso MXN= extended falls for a second day while Russia's rouble RUB= was treading water thanks to support from stronger oil prices LCOc1 O/R .

Investors remain bullish on South Africa though, with Eurobonds in state-run utility Eskom ESCJ.UL extending gains to multi-month highs ZA118706544= . The firm said it would ask local banks to reopen lending facilities that were suspended last year and the Treasury said it would support this request Africa's) leadership has a window of opportunity to implement changes ahead of the 2019 general elections," UBS Wealth Management said.

Global markets were jittery about trade wars though and some Asian heavyweights such as Samsung Electronics 005930.KS and LG Electronics 066570.KS suffered after U.S. President Donald Trump slapped steep tariffs on washing machines and solar cells.

The shares later recovered some ground as Seoul said it would complain to the WTO. eastern Europe, the most notable move was on Hungarian sovereign domestic bond benchmark yields HU10YT=RR which pulled back following a sharp rise since Thursday, when markets had been disappointed with the central bank's interest swap tender.

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