Emerging stocks hit lowest since May 2017, lira firms
By Claire Milhench
LONDON, Sept 12 (Reuters) - MSCI's benchmark emerging
equities index extended losses on Wednesday, hitting
its lowest since May 2017 as trade tensions troubled Asian
bourses, while Turkey's lira firmed ahead of an expected rate
rise on Thursday.
China has told the World Trade Organization (WTO) that it
wants to impose $7 billion a year in sanctions on the United
States in retaliation for Washington's non-compliance with a
ruling in a dispute over U.S. dumping duties.
Separately, U.S. President Donald Trump said that the United
States was taking a tough stance with China.
"There are many external factors which weigh negatively on
the psychology of investors - trade wars for example, which is
not just pitching one country versus another, but conflicts are
now widespread, with many countries involved and affected," said
Cristian Maggio, head of emerging markets strategy at TD
Bank of England Governor Mark Carney also warned that
China's financial system posed one of the bigger risks to global
Asian bourses took the brunt of the selling, with the Asia
ex-Japan index having fallen for 10 straight
sessions, its longest losing streak since September 2000.
Chinese mainland shares closed at their lowest level
since January 2016, down 0.3 percent, with the blue-chip index
down 0.7 percent, its weakest close since August 2016.
China's yuan hit its lowest level against the dollar
in 2-1/2 weeks after an official guidance rate was fixed at its
weakest since Aug. 24.
India's rupee plumbed another record low before
firming 0.4 percent, with inflation seen slipping below the
central bank's medium-term target in August.
South Korea's won also slipped 0.4 percent as
unemployment hit an eight-year high in August.
But the Turkish lira firmed 0.4 percent ahead of
Thursday's central bank meeting. The bank signalled it would
take action after inflation surged to 17.9 percent in August,
its highest in nearly a decade and a half.
"The central bank can't afford not to hike as this would
trigger another steep sell off in the currency," Maggio said,
adding that over the longer term, the risk was the bank would
continue to fall behind the curve.
Turkish stocks rose 0.9 percent, with the banking
sector up 0.4 percent.
Elsewhere in emerging Europe, Russia's rouble fell
0.2 percent to around 69.5 per dollar, while Moscow shares
gained 0.4 percent.
Earlier this week the rouble touched 70.60 per dollar, its
weakest since mid-March 2016, on the threat of more U.S.
sanctions against Moscow.
Trump could sign an executive order as soon as Wednesday
slapping sanctions on any foreign companies or people who
interfere in U.S. elections.
The Czech crown firmed 0.35 percent against the
euro to its strongest since mid-May after the central bank
governor signalled the bank could increase interest rates as
soon as this month.
Overnight, Argentina kept its interest rate at 60 percent as
expected, with the peso taking another hit, slipping 1.5
For GRAPHIC on emerging market FX performance 2018, see http://tmsnrt.rs/2e7eoml
For GRAPHIC on MSCI emerging index performance 2018, see http://tmsnrt.rs/2dZbdP5
For TOP NEWS across emerging markets
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 1002.58 -0.75 -0.07 -13.46
Czech Rep 1090.23 +8.79 +0.81 +1.12
Poland 2255.82 +7.47 +0.33 -8.35
Hungary 36450.78 +78.84 +0.22 -7.43
Romania 8270.44 -11.67 -0.14 +6.66
Greece 699.87 +7.83 +1.13 -12.77
Russia 1063.59 +7.69 +0.73 -7.87
South Africa 50091.36 +49.27 +0.10 -4.65
Turkey 93256.68 +867.57 +0.94 -19.14
China 2656.11 -8.69 -0.33 -19.69
India 37625.61 +212.48 +0.57 +10.48
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 25.55 25.64 +0.35 -0.09
Poland 4.31 4.30 -0.13 -3.07
Hungary 324.69 324.44 -0.08 -4.36
Romania 4.63 4.63 -0.11 +0.93
Serbia 118.34 118.32 -0.02 +0.05
Russia 69.47 69.38 -0.13 -17.00
Kazakhstan 377.67 380.57 +0.77 -11.88
Ukraine 28.01 28.08 +0.25 +0.48
South Africa 15.03 15.05 +0.13 -17.76
Kenya 100.70 100.65 -0.05 +2.38
Israel 3.59 3.58 -0.25 -3.05
Turkey 6.39 6.42 +0.41 -40.73
China 6.87 6.87 +0.05 -5.25
India 72.35 72.63 +0.39 -11.78
Brazil 4.15 4.15 +0.01 -20.23
Mexico 19.13 19.18 +0.28 +2.71
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 403 2 .00 7 60.53 1
(Reporting by Claire Milhench; additional reporting by Karin
Strohecker; editing by Alexander Smith)
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