EMERGING MARKETS-Stimulus hopes lift emerging stocks after latest US tariffs
By Claire Milhench
LONDON, Sept 18 (Reuters) - Emerging equities rose on Tuesday as investors bet that China would need to step up infrastructure spending to offset the latest tariffs from the United States, while Turkey's lira dipped back towards pre-rate hike levels.
U.S. President Donald Trump has escalated his trade war with China, imposing 10 percent tariffs on about $200 billion worth of Chinese imports, with the rate set to increase to 25 percent by the end of 2018. said it would retaliate but MSCI's benchmark emerging stocks index rose 0.2 percent .MSCIEF as some investors believe Beijing will have to boost spending on roads and bridges to help ride out the storm.
"There are hopes they will weather the trade shocks with more easing - that is creating a bit of a positive response in the market," said Jakob Christensen, head of emerging markets research at Danske Bank.
Chinese mainland stocks .CSI300 bounced 2 percent to one-week highs with infrastructure stocks jumping over 3 percent. Hong Kong shares .HSI rose 0.6 percent but the yuan CNY= weakened 0.2 percent against the dollar. Europe opened higher, with Polish stocks .WIG20 up 1.2 percent, while Moscow shares .IMOEX gained 0.4 percent.
Turkey's lira TRY= remained the main currency underperformer, down 0.4 percent, erasing most of the gains made after last Thursday's hefty 625 basis point interest rate rise.
In a follow-up measure on Tuesday, the central bank raised the rate paid on lira reserves held at the bank to 13 percent from 7 percent. are effectively asking banks to put more liquidity aside and reduce the funds they have available for lending so it's doing the same thing as monetary policy tightening," said Christensen.
Banking sector stocks .XBANK rose 1.3 percent, rebounding from Monday's 2.4 percent fall, with the Turkish market .XU100 as a whole up 0.8 percent.
Turkish bank shares sold off hard in the previous session after President Tayyip Erdogan was quoted as calling for an investigation into members of the opposition who serve on the board of Isbank ISCTR.IS , the country's biggest lender. is targeting something that's very robust (with Isbank) and there's only so much he can do. There's only so far he can go politically to undermine economic constructs," said Dominic Armstrong, chief executive and co-founder of the Horatius Fund.
Russia's rouble RUB= firmed 0.5 percent, supported by a deal with Turkey on a new demilitarised buffer zone in Syria's Idlib region. forint was steady against the euro EURHUF= ahead of a central bank meeting at which rates are expected to stay on hold at record lows. Investors are looking for more details of future monetary tightening, with inflation picking up.
Overnight, Argentina's battered peso currency ARS= inched higher after the government unveiled its budget plan and the IMF said "important progress" had been made on revamping the country's standby loan agreement.
Equities
Latest
Net Chg % Chg % Chg
on year
Morgan Stanley (NYSE: MS )
Emrg Mkt Indx .MSCIEF 1018.29
+1.86 +0.18 -12.10
Czech Rep
0.00
+0.00 +0.00 -100.00
Poland
2236.26 +25.27 +1.14 -9.14
Hungary
0.00
+0.00 +0.00 -100.00
Romania
8193.38 +22.47 +0.27 +5.67
Greece
681.45
-1.30 -0.19 -15.07
Russia
1109.75 +10.25 +0.93 -3.87
South Africa
.JTOPI 49827.04 -369.88 -0.74 -5.15
Turkey
.XU100 95129.09 +781.43 +0.83 -17.52
China
2699.95 +48.16 +1.82 -18.36
India
.BSESN 37522.84 -62.67 -0.17 +10.18
Currencies
Latest
Prev
Local
Local
close currency currency
% change % change
in 2018
Czech Rep
EURCZK=
25.45
25.44 -0.04
+0.30
Poland
EURPLN=
4.30
4.30 -0.10
-2.93
Hungary
EURHUF= 324.65
324.77 +0.04
-4.35
Romania
EURRON=
4.64
4.64 -0.03
+0.71
Serbia
EURRSD= 118.15
118.27 +0.10
+0.21
Russia
RUB=
67.71
68.07 +0.53 -14.84
Kazakhstan
KZT=
367.92
371.17 +0.88
-9.55
Ukraine
28.16
28.10 -0.21
-0.05
South Africa ZAR=
14.89
14.91 +0.13 -17.00
Kenya
KES=
100.70
100.80 +0.10
+2.38
Israel
ILS=
3.58
3.58 +0.14
-2.75
Turkey
TRY=
6.34
6.31 -0.38 -40.21
China
CNY=
6.87
6.85 -0.19
-5.26
India
INR=
72.47
72.53 +0.08 -11.92
Brazil
4.13
4.13 -0.05 -19.88
Mexico
18.83
18.84 +0.04
+4.35
Debt
Index Strip Spd Chg %Rtn Index
Sov'gn Debt 11EML EMBIG 385
1
.01 7 68.64 1
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