LONDON, June 19 — Emerging stocks enjoyed their biggest daily gains in nearly four weeks today though weaker oil prices took a toll on many markets, with Russia’s rouble down half a per cent.
MSCI’s emerging equity benchmark rose 0.7 per cent lifted by healthy gains in heavyweights Taiwan and Hong Kong which jumped around 1 per cent, with stocks in mainland China matching those gains thanks to signs of tight liquidity conditions easing.
However, currencies failed to take advantage of a tepid dollar after weaker-than-forecast data on US housing and consumer sentiment on Friday cast doubt on the health of the world’s top economy. This led the greenback to reverse gains made in the wake of the Federal Reserve’s rate hike.
The rouble slipped 0.5 per cent against the dollar, trading at its weakest in one month as oil prices slid lower.
The crude price fall prompted a decision by Moscow policy makers on Friday to trim the key interest rate by 25 basis points to 9.00 per cent — less than some of analysts had expected.
Explaining the decision, central bank governor Elvira Nabiullina said annual inflation had neared its long-awaited goal of 4 per cent as inflationary expectations of households had fallen to an all-time low in May.
“What was interesting about that meeting, more than the decision itself, was the rhetoric,” said Cristian Maggio, head of emerging markets strategy at TD Securities.
“The Central Bank of Russia came across more hawkish than what the market had expected.”
The market was in the process of repricing, Maggio said. Before the meeting the expectation was 300 basis points worth of cuts over the year.
Other currencies fared little better with Mexico’s peso and Israel’s shekel easing 0.3 per cent while Turkey’s lira slipped 0.2 per cent.
Currencies across central Europe weakened against the dollar, with the Polish zloty and the Hungarian forint easing 0.2 per cent.
Romania’s leu hovered near a more than four-year low. The currency was hit by political upheavals last week. The ruing leftists have filed a no-confidence motion in parliament against Prime Minister Sorin Grindeanu.
In the Middle East, Qatari stocks fell 1 per cent, hurt by oil and a 2 per cent tumble in its biggest petrochemical firm Industries Qatar.
Emerging Markets Prices from Reuters Equities Latest Net Chg per cent Chg per cent Chg on year
Morgan Stanley Emrg Mkt Indx 1010.35 +7.23 +0.72 +17.17
Czech Rep 1000.69 +9.92 +1.00 +8.58
Poland 2332.03 +27.53 +1.19 +19.72
Hungary 35918.39 +405.92 +1.14 +12.23
Romania 8430.33 -37.34 -0.44 +18.99
Greece 813.12 +7.00 +0.87 +26.33
Russia 997.09 +2.71 +0.27 -13.47
South Africa 44925.34 +413.19 +0.93 +2.33
Turkey 98994.29 +801.73 +0.82 +26.69
China 3145.02 +21.85 +0.70 +1.33
India 31288.59 +232.19 +0.75 +17.51
Currencies Latest Prev Local Local close currency currency per cent change per cent change in 2017
Czech Rep 26.19 26.16 -0.13 +3.12
Poland 4.21 4.21 -0.09 +4.60
Hungary 307.25 307.49 +0.08 +0.51
Romania 4.58 4.58 -0.03 -1.04
Serbia 121.83 121.90 +0.06 +1.25
Russia 57.99 57.74 -0.43 +5.64
Kazakhstan 320.05 320.21 +0.05 +4.25
Ukraine 26.02 26.02 -0.02 +3.75
South Africa 12.81 12.81 -0.03 +7.17
Kenya 103.55 103.45 -0.10 -1.14
Israel 3.52 3.51 -0.25 +9.28
Turkey 3.51 3.50 -0.24 +0.48
China 6.82 6.81 -0.10 +1.85
India 64.38 64.45 +0.11 +5.54
Brazil 3.29 3.29 +0.08 -1.11
Mexico 17.96 17.90 -0.34 +15.31
All data taken from Reuters at 08:58 GMT. Currency per cent change calculated from the daily US close at 2130 GMT.
— Reuters
