LONDON May 22 Emerging equities extended gains
on Monday, riding a rise in oil prices despite a firmer dollar
and mounting political turmoil in Brazil.
MSCI's emerging market benchmark rose 0.9 percent
in its steepest daily gain in a month, with stocks in Hong Kong
hitting 22-month highs and other Asian bourses
, India and Turkey also firming.
Stocks seemed to take little note of North Korea's missile
test on Sunday - its second in a week - even though South Korea
said this dashed hopes for peace between the neighbours.
Emerging markets are likely to be underpinned by solid
technicals, said Steve Cook, co-head of emerging market fixed
income at PineBridge Investments.
"The inflow story remains robust and global investors are
still searching for yields and while we are not cheap versus
fundamentals, we still have a yield and spread pick up versus
developed markets," said Cook.
"As long as that continues we will still have demand for
Emerging currencies, however, found themselves less able to
advance as the dollar firmed after a week of political turmoil
But a jump in oil before Thursday's OPEC meeting,
which is expected to deliver an extension or deepening of supply
cuts, helped currencies of crude exporters such as Russia
and Kazakhstan strengthen 0.5 percent against the
dollar.. Russian 10-year yields fell to a new 3-1/2-year
Russia's Economy Minister Maxim Oreshkin predicted the
country would see lower inflation and a smaller budget deficit
if OPEC and non-OPEC producers extended their deal.
Turkey's lira booked small gains of 0.1 percent after
President Tayyip Erdogan was elected leader of the ruling AK
Party, a move enabling him to reassert his grip on the party and
its legislative work.
Erdogan pledged to fight Turkey's enemies and to keep a
state of emergency until peace is achieved against Kurdish and
Investors were closely watching Brazil, where pressure is
mounting on President Michel Temer, implicated in a corruption
scandal, to step down. Temer refuses to resign, saying the
evidence against him has been doctored.
London-listed ETFs of Brazilian stocks
edged lower, though the real hovered unchanged.
Cook of PineBridge described the contagion effect to other
emerging markets as "nearly zero".
"Brazil sold off because of political uncertainty but it
does not impact Colombia or Peru from a macro perspective and
that's the difference from 5-10 years ago," he added.
In other news, Egypt unexpectedly raised interest rates by
200 basis points on Sunday, citing stronger economic growth and
falling unemployment, while inflation which hit a three-decade
high in April.
For GRAPHIC on emerging market FX performance 2017, see tmsnrt.rs/2e7eoml
For GRAPHIC on MSCI emerging index performance 2017, 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
Emrg Mkt Indx 1004.35 +8.68 +0.87 +16.48
Czech Rep 1021.56 +1.43 +0.14 +10.85
Poland 2334.06 +5.36 +0.23 +19.82
Hungary 34776.31 -59.49 -0.17 +8.67
Romania 8460.70 -24.90 -0.29 +19.42
Greece 784.47 +0.30 +0.04 +21.88
Russia 1087.87 +0.12 +0.01 -5.59
South Africa 48068.77 +106.17 +0.22 +9.49
Turkey 96138.36 +991.02 +1.04 +23.04
China 3075.92 -14.71 -0.48 -0.89
India 30591.39 +126.47 +0.42 +14.89
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 26.49 26.48 -0.02 +1.97
Poland 4.19 4.19 +0.03 +5.11
Hungary 308.37 308.41 +0.01 +0.15
Romania 4.56 4.56 +0.09 -0.50
Serbia 122.79 122.85 +0.05 +0.46
Russia 56.72 56.96 +0.42 +8.01
Kazakhstan 310.51 312.36 +0.60 +7.45
Ukraine 26.34 26.35 +0.06 +2.53
South Africa 13.19 13.23 +0.26 +4.08
Kenya 103.25 103.20 -0.05 -0.85
Israel 3.59 3.58 -0.25 +7.33
Turkey 3.56 3.57 +0.37 -0.96
China 6.89 6.88 -0.13 +0.74
India 64.60 64.56 -0.07 +5.17
Brazil 3.25 3.25 -0.01 +0.01
Mexico 18.67 18.70 +0.17 +10.96
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 324 -2 .04 7 82.90 1
All data taken from Reuters at 09:10 GMT. Currency percent
change calculated from the daily U.S. close at 2130 GMT.
(Additional reporting by Sujata Rao; Editing by Andrew Heavens)