June 18, 2020 / 8:22 AM / 19 days ago

EMERGING MARKETS-Stocks, forex muted; Turkish equities propped up by Turkcell

* Turkcell rises about 9% on Wealth Fund deal

* MSCI EM stocks index up 0.1%

* South African rand lags broader peers

By Ambar Warrick

June 18 (Reuters) - Equities and currencies in the developing world were muted on Thursday as support from sustained stimulus measures to revive economic growth was countered by a resurgence in COVID-19 cases.

A spike in coronavirus infections in certain U.S. states raised concerns about fresh lockdown measures to combat the epidemic. A recent outbreak in Beijing also rattled sentiment.

Still, the MSCI’s index of emerging market stocks rose about 0.1%, as recent gains on Wall Street saw investors turning more optimistic on equities, while the easing of pandemic-related lockdowns across the globe also helped.

Turkish stocks were among the few gainers for the day, adding about 0.8%. Mobile operator Turkcell Iletisim was the biggest boost to the index after the Turkey Wealth Fund on Thursday agreed to acquire control of the firm.

Hopes of monetary stimulus continued to help broader stocks, with rate cuts from Brazil and Indonesia suggesting that major central banks stood ready with more liquidity measures.

“It seems that there is a battle between those who are optimistic over an economic recovery as lockdown measures continue to be lifted around most of the world, and those who are concerned over a second wave of coronavirus infections,” Charalambos Pissouros, senior market analyst at JFD Group, wrote in a note.

Emerging market currencies weakened slightly on the day, with the U.S. dollar and the yen enjoying sustained safe haven demand, pressuring risk-driven assets.

South Africa’s rand was among the biggest percentage losers for the day, while stocks in the country also fell, despite President Cyril Ramaphosa outlining a further easing in COVID-19 lockdown measures on Wednesday.

Russian stocks fell, while the rouble was flat ahead of a central bank interest rate decision on Friday.

The bank is expected to cut its benchmark rate by a deeper-than-usual 100 basis points, as economic activity remains quashed by the coronavirus.

Central European currencies such as the Polish zloty and the Hungarian forint retreated slightly against the euro, while stocks in the region also fell.

For GRAPHIC on emerging market FX performance in 2020, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2020, see tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Ambar Warrick in Bengaluru; Editing by Edmund Blair)

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