* Investors remain stubbornly upbeat about growth
* MSCI’s EM stocks index touches highest level since March
* South African rand pressured ahead of budget speech
* Russian stock markets closed on Wednesday
By Shreyashi Sanyal
June 24 (Reuters) - Stocks in the developing world touched a 16-week high on Wednesday, extending gains from the previous session as investors remained positive about a return to growth with the re-opening of global economies even as COVID-19 cases increased.
The MSCI’s index for emerging markets stocks rose 0.1%, while its counterpart index for currencies was flat.
Optimism about the global economy was supported by encouraging manufacturing data from Europe, with France standing out as loosening lockdown measures there led to a slight return to growth.
“The loosening of lockdown restrictions has helped economies recover from their respective self-induced comas,” said David Madden, a market analyst at CMC Markets UK.
“But recovery in economic activity comes at a cost and that is why there have been increases in COVID-19 cases in several countries such as China, Germany, India, Brazil and the United States.”
There was some caution in markets, which have assumed a very high bar for fully shutting down economies again, as gold prices jumped and more money chased the U.S. dollar.
In emerging market FX, the South African rand slipped 0.4% ahead of a widely anticipated COVID-19 budget speech by Finance Minister Tito Mboweni. The budget speech is due at 1300 GMT.
The special budget, brought forward by the treasury in response to the COVID-19 outbreak and President Cyril Ramaphosa’s 500 billion rand ($29 billion) stimulus package, is expected to show ballooning deficit and debt in Africa’s most industrialized economy.
“I urge caution in the rand,” Antje Praefcke FX and emerging markets analyst at Commerzbank wrote in a client note.
“The presentation of the revised emergency budget by Minister of Finance Tito Mboweni is likely to illustrate very clearly today that money is running out left, right and centre.”
Currencies of countries in eastern and central Europe, including Hungary and the Czech Republic edged lower against the euro.
The Russian rouble edged lower but held at near two-week highs against the dollar. Stock markets in Russia were closed on Wednesday as President Vladimir Putin declared a public holiday to hold a military parade that was cancelled last month due to the new coronavirus outbreak.
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