* Global COVID-19 cases climb above 13 million
* U.S.-China trade tensions lift dollar
* S&P Global reduces emerging markets growth forecast
* Markets await Polish central bank rate decision
By Shreyashi Sanyal
July 14 (Reuters) - Emerging markets stocks fell on Tuesday after COVID-19 cases continued to rise globally and economic growth forecasts were cut further, with currencies taking a hit from a firmer dollar as U.S.-China tensions flared.
Global coronavirus cases topped 13 million on Monday, while a return to curbs for the U.S. state of California revived worries over whether the virus can cause more economic damage.
“The prospect of the country (United States) reversing back to partial lockdown could continue to spook the market,” said Saktiandi Supaat, head of FX research at Maybank.
MSCI’s index for emerging market equities fell 1.2%, with stocks in Asia leading declines, while its currencies counterpart slipped 0.4% against the U.S. dollar .
Demand for the dollar, widely viewed as a safe-haven currency, firmed on heightened geopolitical tensions after the United States on Monday rejected China’s disputed claims to offshore resources in most of the South China Sea, a that move met with criticism from Beijing.
“U.S.-China tensions have broadened from trade to technology to sanctions and now to territorial disputes,” Maybank’s Supaat said.
Developing world markets have risen sharply from a steep downturn in March on the back of global stimulus, but moves in recent weeks have been subdued as the focus turns towards earnings forecasts.
More negative forecasts poured in as ratings agency S&P Global cut its emerging market growth expectations on Monday, predicting a 4.7% slump on average this year, while warning that all countries would be left with permanent scars.
S&P said that South Africa’s economy will contract by more than initially projected, projecting a 6.9% decline in 2020, compared with a previous forecast of a 4.5% contraction. The South African rand gained slightly in early trading.
Poland’s central bank is expected to release its interest rate decision later on Tuesday, It is also expected to release its current account balance for May, which is estimated at 701 million euros ($794.4 million).
The Polish zloty was range-bound after the re-election of President Andrzej Duda on Monday, sparking concern over the potential for renewed confrontation with the European Union.
Russian stocks fell 1.8% as gas producer Gazprom declined after reporting a first-quarter net loss of 116 billion roubles ($1.64 billion).
The Russian rouble was flat.
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Reporting by Shreyashi Sanyal in Bengaluru Editing by David Goodman