December 8, 2016 / 11:09 AM / 10 months ago

EMERGING MARKETS-Russian shares hit record high after Rosneft stake sale

By Karin Strohecker
    LONDON, Dec 8 (Reuters) - Emerging market stocks climbed the
most in a month on Thursday, as Russia's approval of the sale of
a 10.5 billion euro stake in its largest oil firm sent Moscow
shares to a record high and forecast-beating Chinese trade data
lifted the mood.
    MSCI's emerging market index jumped 1.3 percent in
the wake of China reporting upbeat trade figures, with exports
and imports both beating forecasts. 
    The European Central Bank was also expected to extend its
already generous 1.5 trillion euro stimulus programme later.
That could help offset some of the pressure on EM assets if U.S.
interest rates rise next week as expected. 
    "The trade data is giving an extra boost to emerging markets
today but it's part of a broader trend," said Per Hammarlund,
chief emerging markets strategist at SEB. 
    "People have started to get used to (U.S. President-elect
Donald) Trump being in office and the Fed hike is pretty much
fully priced in... Commodity prices have continued to go up, and
that sentiment is also starting to affect emerging markets."
    China's data as well as a softer dollar in the
currency markets had given most emerging Asian markets a solid
lift overnight, although notably not those in China itself.
    Russian rouble-denominated stocks then hit an all
time high after Moscow said on Wednesday it sold a 10.5 billion
euros ($11.3 billion) stake in oil giant Rosneft to
Qatar and commodities trader Glencore. 
    Not only was the money considerable, but the deal also
confounded expectations that the Kremlin's standoff with the
West might scare off major investors from such high profile
assets.
    Having been buffeted rather than battered like many emerging
markets by Trump's U.S. election win, central and eastern Europe
were bracing for the next move from the ECB later on Thursday.
    Moves by the ECB tend to influence CEE countries like
Poland, the Czech Republic, Hungary and Romania because the euro
zone is so close and such a big market for local companies.
    The central bank is expected to extend its money printing
programme until at least next September. 
    Polish stocks briefly surged to a six-month high in
Warsaw as state-controlled firms also announced a deal to buy
out Italy's UniCredit's Polish arm.
    The deal ended months of uncertainty. "The historic exit
from Poland by a major Italian bank marks a turn that reflects
an EU-wide home-bias tendency," said Simon Quijano-Evans,
strategist at Legal & General Investment Management, in a note.
    EM currencies were generally higher against the backdrop of
a softer dollar, though the euro was climbing which meant it was
higher against the likes of the zloty and Hungary's
forint.
    The South Korean won and the Taiwan dollar
 climbed near one-month peaks. Indonesia's rupiah
 meanwhile raced to a near four-week high on solid
demand for local bonds among foreign investors.
    Bucking the trend, the Chinese yuan edged down on
local corporate dollar demand. 

For GRAPHIC on emerging market FX performance 2016, see tmsnrt.rs/2e7eoml

For GRAPHIC on MSCI emerging index performance 2016, see tmsnrt.rs/2dZbdP5
    
    For CENTRAL EUROPE market report, see 
    For TURKISH market report, see 
    For RUSSIAN market report, see )
  Emerging Markets                                             
 Prices from Reuters                       
  Equities                  Latest    Net Chg  % Chg  % Chg
                                                      on year
  Morgan Stanley                                               
  Emrg Mkt Indx              878.92   +11.31   +1.30  +10.68 
  Czech Rep                  895.81    +1.57   +0.18   -6.33 
  Poland                    1899.11    +9.60   +0.51   +2.15 
  Hungary                  30370.43  +218.42   +0.72  +26.96 
  Romania                   6866.42    -7.89   -0.11   -1.97 
  Greece                     644.36    +4.29   +0.67   +2.06 
  Russia                    1081.59   +14.84   +1.39  +42.87 
  South Africa             43480.86  +553.69   +1.29   -5.06 
  Turkey                   76238.87  +208.09   +0.27   +6.29 
  China                     3215.73    -6.51   -0.20   -9.14 
  India                    26694.28  +457.41   +1.74   +2.21 
 
($1 = 0.9264 euros)

 (Additional reporting by Marc Jones and Claire Milhench;
Editing by Hugh Lawson)

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