| LONDON, June 14
LONDON, June 14 Russian stocks slipped close to
one-year lows on Wednesday, facing the prospect of a fresh round
of U.S. sanctions and lower oil prices while Chinese stocks also
fell after lacklustre investment data that hinted at slower
Broader emerging stocks and currencies inched up however
before a U.S. Federal Reserve meeting that is expected to
deliver a rate rise. But unless accompanied by unexpectedly
hawkish language, emerging markets are unlikely to be impacted.
MSCI's emerging equity index has failed to make much headway
after hitting successive two-year highs and China's tepid
investment data, reinforcing the picture of slower growth, could
ensure markets continue to move sideways.
The benchmark rose 0.2 percent, up for the second straight
day after Monday's tech-driven selloff, for year-to-date gains
of over 17 percent
"Emerging markets have plateaued a bit as people want to see
what the Fed does and if it downgrades inflation expectations
the dollar will sell off and that's good news for EM," said
Peter Kinsella, head of FX and rates strategy at Commonwealth
Bank of Australia.
"Commodity prices too are way below the levels we saw before
so some good news on commodities will be well-received."
Shanghai and Shenzen-listed shares fell 0.7 percent and 1.3
percent respectively after the data while
shares in companies partly owned by Anbang Insurance Group
tumbled after its head resigned.
Russian shares lost 0.6 percent and Moscow is this
year's worst performing emerging equity market in dollar terms.
A fresh headwind is U.S. legislation that could impose new
sanctions on Russia and prevents the White House from easing or
ending sanctions without congressional approval.
Russian assets have also been hurt by oil's 10 percent
decline since late-May and a hawkish central bank stance that
has allowed the rouble to shrug off crude price weakness. The
rouble was flat on the day despite a one percent fall in Brent
"The latest oil price action is ominous for Russian equities
and the rouble's de-coupling from oil compounds the blow for
Russian oil stocks," Christopher Granville at TS Lombard wrote,
predicting the pace of Russian rate cuts to slow to 25 bps.
Rouble strength means investors should be overweight on
retail-oriented domestic stocks while selling export-oriented
ones, especially those in oil and gas, he advised clients in a
Qatari stocks meanwhile bounced almost 1 percent to a
three-day high while the riyal also firmed slightly in
forward markets against the dollar, off record lows.
In central Europe, Hungarian stocks jumped 1 percent to new
record highs, lifted by pharma blue-chip Gideon Richter
and OTP Bank which gained 1.7 percent and 1.2 percent
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 1011.37 +1.59 +0.16 +17.29
Czech Rep 1003.24 +1.94 +0.19 +8.86
Poland 2296.43 -5.98 -0.26 +17.89
Hungary 35902.70 +314.00 +0.88 +12.19
Romania 8475.80 +29.57 +0.35 +19.63
Greece 797.38 +0.25 +0.03 +23.89
Russia 1024.40 -6.59 -0.64 -11.10
South Africa 45310.37 +45.50 +0.10 +3.21
Turkey 99303.59 +3.92 +0.00 +27.09
China 3130.44 -23.30 -0.74 +0.86
India 31166.17 +62.68 +0.20 +17.05
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 26.17 26.14 -0.12 +3.18
Poland 4.20 4.19 -0.24 +4.82
Hungary 306.20 305.99 -0.07 +0.86
Romania 4.56 4.56 +0.07 -0.57
Serbia 122.14 122.21 +0.06 +0.99
Russia 57.00 57.00 +0.01 +7.48
Kazakhstan 316.51 315.96 -0.17 +5.42
Ukraine 26.03 26.02 -0.03 +3.75
South Africa 12.76 12.76 -0.07 +7.57
Kenya 103.30 103.30 +0.00 -0.90
Israel 3.53 3.53 +0.03 +9.23
Turkey 3.52 3.52 +0.03 +0.28
China 6.79 6.80 +0.06 +2.19
India 64.28 64.32 +0.07 +5.71
Brazil 3.32 3.31 -0.04 -1.88
Mexico 18.04 18.05 +0.10 +14.86
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 319 1 .06 7 90.31 1
All data taken from Reuters at 08:57 GMT.
Currency percent change calculated from the daily U.S.
close at 2130 GMT.
(Editing by Keith Weir)