EMERGING MARKETS-Trade hopes boost emerging stocks, lira dips before rate decision

  • Reuters
  • Stock Market News
EMERGING MARKETS-Trade hopes boost emerging stocks, lira dips before rate decision
Credit: © Reuters.

By Claire Milhench

LONDON, Sept 13 (Reuters) - Hopes for new trade talks between the United States and China boosted emerging-market stocks on Thursday, while Turkey's lira slipped before a critical central bank meeting.

MSCI's benchmark emerging-market equities index .MSCIEF rose 1 percent after the United States invited Chinese officials to restart trade talks, as .S. tariffs on $200 billion worth of Chinese goods loomed are witnessing some signs of respite across risky assets due to this news, but we still expect trade tensions to escalate in coming months," said Piotr Matys, an emerging markets strategist at Rabobank

MSCI's Asia ex-Japan index .MIAPJ0000PUS rose 0.9 percent after its longest losing streak since 2000. Hong Kong shares .HSI leapt 2.5 percent in their biggest daily gain since May 2016. Chinese mainland stocks .CSI300 .SSEC rose over 1 percent. China's yuan CNY= strengthened by 0.1 percent beaten-down markets also gained. Indonesian shares .JKSE rose 0.8 percent, Polish stocks 1 percent -- recovering from 1 1/2-month lows -- and Russian shares were up 0.4 percent.

In Turkey, the lira TRY= retreated 0.6 percent before the central bank meets. Investors expect it to raise rates after inflation shot up to almost 18 percent in August, its highest in nearly 15 years.

The central bank confounded expectations for a rate increase at its July meeting, but it has signalled it will act this time.

"The central bank has put pressure on itself by fuelling expectations that interest rates may increase so there is no room to disappoint the market," Matys said.

In a Reuters poll, all 11 economists predicted the benchmark one-week repo rate would be raised from 17.75 percent. Forecasts ranged from an increase of 225 basis points to 725 bps said Rabobank's call was for a 500 bps hike to restore confidence among foreign investors, households and businesses, but the bank would need to make a hawkish statement that it was ready to raise rates again if necessary.

Turkey has ruled that property sales and rental agreements must be in lira in a fresh step to support the currency, which is down around 40 percent versus the dollar this year rouble RUB= gained 0.6 percent before its central bank meets on Friday. It is expected to leave rates unchanged, according to a Reuters poll. However, the governor has said rates could rise as early as this month in light of increased volatility rouble has been pummelled by the threat of more U.S. sanctions. U.S. President Donald Trump signed an executive order on Wednesday to impose sanctions on foreign countries or people who try to interfere in U.S. politics forint EURHUF= slipped 0.1 percent after the European parliament voted on Wednesday to punish Hungary for flouting European Union rules on democracy forint had sold off half a percent on Wednesday, then recovered after Poland said it would block any EU sanctions on Hungary.

Equities

Latest

Net Chg % Chg % Chg

on year

Morgan Stanley (NYSE: MS )

Emrg Mkt Indx .MSCIEF 1014.46

+9.90 +0.99 -12.43

Czech Rep

.PX

1093.78

+4.47 +0.41 +1.45

Poland

.WIG20

2226.97 +16.81 +0.76 -9.52

Hungary

.BUX

36090.11 -13.96 -0.04 -8.35

Romania

.BETI

8237.33 -24.53 -0.30 +6.24

Greece

.ATG

692.22

+1.95 +0.28 -13.73

Russia

.IRTS

1079.78

+8.46 +0.79 -6.47

South Africa

.JTOPI 50110.52 +295.78 +0.59 -4.61

Turkey

.XU100 92180.40 -46.98 -0.05 -20.07

China

.SSEC

2686.58 +30.47 +1.15 -18.77

India

.BSESN 37717.96 +304.83 +0.81 +10.75

Currencies

Latest

Prev

Local

Local

close currency currency

% change % change

in 2018

Czech Rep

EURCZK=

25.57

25.58 +0.04

-0.17

Poland

EURPLN=

4.31

4.31 -0.10

-3.12

Hungary

EURHUF= 325.29

324.88 -0.13

-4.54

Romania

EURRON=

4.64

4.63 -0.07

+0.88

Serbia

EURRSD= 118.17

118.23 +0.05

+0.19

Russia

RUB=

68.56

68.94 +0.56 -15.91

Kazakhstan

KZT=

374.67

377.37 +0.72 -11.18

Ukraine

UAH=

28.11

28.04 -0.25

+0.12

South Africa ZAR=

14.85

14.94 +0.59 -16.80

Kenya

KES=

100.95

100.75 -0.20

+2.13

Israel

ILS=

3.58

3.57 -0.13

-2.82

Turkey

TRY=

6.36

6.33 -0.58 -40.46

China

CNY=

6.85

6.86 +0.14

-4.99

India

INR=

72.03

72.15 +0.17 -11.38

Brazil

BRL=

4.16

4.16 -0.09 -20.39

Mexico

MXN=

19.03

19.01 -0.08

+3.25

Debt

Index Strip Spd Chg %Rtn Index

Sov'gn Debt 11EML EMBIG 396

-1

.05 7 63.76 1

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