By Karin Strohecker
LONDON, Oct 6 Emerging stocks hit a one-week
high on Thursday after strong U.S. economic data, though bets on
a December rate rise by the Federal Reserve brought many
currencies under pressure.
MSCI's emerging benchmark rose 0.3 percent,
following developed bourses higher and lifted by gains across
Asia , Turkey and parts of central and
The rise follows a recent batch of upbeat data from the
world's largest economy, the latest on Wednesday showing U.S.
services sector activity soaring to an 11-month high thanks to
broad-based improvement across the index, helping the case for
the Fed to raise interest rates.
More key numbers are coming on Friday, when U.S non-farm
payrolls data is expected to show gains of 175,000 jobs,
according to a Reuters poll. A robustly growing U.S. economy is
generally seen as a positive for emerging markets even if it
leads the Fed to raise interest rates.
"The data has been quite strong yesterday, but also in
recent days more generally ... Payrolls is one thing that may
introduce some thrill at the end of trading this week," said
Cristian Maggio, head of emerging markets strategy at TD
Maggio predicted a Fed move in December would have only a
temporary negative impact on emerging markets.
"If they hike, it is sort of a dovish hike - they will step
up a bit the process of normalising the interest rates, but we
expect them to signal that this will be an extremely gradual
hiking cycle," he said.
However, with the dollar index up nearly 1 percent
this week, emerging currencies felt the pressure.
South Africa's rand weakened by 0.3 percent against
the greenback, while Israel's shekel matched that fall.
Russia's rouble traded flat in line with oil prices
while Turkey's lira followed suit.
Across central and eastern Europe, Hungary's forint
slipped 0.2 percent against the euro after hitting a
15-month high earlier. Hungary's economic and credit rating
improvement is enticing more investors, and some local market
players said investors may test authorities' tolerance for a
Concerns that the European Central Bank could taper its
stimulus has sent a chill through regional assets, with bonds
selling off, especially in Poland, where five- and 10-year
yields are near three-month highs
Yet a Reuters poll showed investors were upbeat about
Hungarian assets further ahead, expecting forint-denominated
government bonds to outperform Polish peers.
Emerging Markets Prices from Reuters
Equities Latest Net Chg % Chg % Chg
Emrg Mkt Indx 918.20 +2.94 +0.32 +15.62
Czech Rep 886.77 +5.68 +0.64 -7.27
Poland 1754.88 -7.35 -0.42 -5.61
Hungary 28337.59 -149.46 -0.52 +18.46
Romania 6939.94 -23.72 -0.34 -0.92
Greece 574.00 -1.37 -0.24 -9.08
Russia 998.61 +1.50 +0.15 +31.91
South Africa 45388.85 +80.37 +0.18 -0.89
Turkey 78419.73 +566.09 +0.73 +9.33
China 3005.51 +7.03 +0.23 -15.08
India 28075.69 -145.29 -0.51 +7.50
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 27.00 27.01 +0.03 -0.01
Poland 4.30 4.30 -0.02 -0.93
Hungary 305.00 304.50 -0.16 +3.16
Romania 4.47 4.46 -0.29 +1.07
Serbia 122.97 123.02 +0.04 -1.22
Russia 62.31 62.33 +0.03 +17.08
Kazakhstan 332.80 332.56 -0.07 +2.31
Ukraine 25.86 25.84 -0.08 -7.38
South Africa 13.78 13.71 -0.46 +12.23
Kenya 101.17 101.15 -0.02 +1.02
Israel 3.78 3.77 -0.17 +2.97
Turkey 3.05 3.05 +0.02 -4.37
China 6.67 6.67 -0.00 -2.65
India 66.65 66.56 -0.13 -0.67
Brazil 3.22 3.22 +0.04 +23.05
Mexico 19.23 19.21 -0.12 -10.70
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 351 1 .04 7 71.27 1
All data taken from Reuters at 09:25 GMT. Currency percent
change calculated from the daily U.S. close at 2130 GMT.
For GRAPHIC on emerging market FX performance 2016, see link.reuters.com/jus35t
For GRAPHIC on MSCI emerging index performance 2016, see link.reuters.com/weh36s
For GRAPHIC on MSCI emerging Europe performance 2016, see link.reuters.com/jun28s
For GRAPHIC on MSCI frontier index performance 2016, see link.reuters.com/zyh97s
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see )
(Reporting by Karin Strohecker; Editing by Andrew Heavens)