Dollar, commodities weigh on stocks, Turkey's lira jitters
By Karin Strohecker
LONDON, Jan 17 (Reuters) - A stronger dollar and weaker
commodity prices knocked emerging stocks off their near-decade
highs and weighed on currencies, with Turkey's lira on track for
its worst week since early November on flaring geopolitical
MSCI's emerging market benchmark edged 0.1 percent
lower after the benchmark had hit the highest level since May
2008 on Tuesday, though individual bourses performed very mixed.
Heavyweight South Korea and some China mainland
bourses eased 0.2 percent, while stocks in oil
exporters Russia , Qatar and Kuwait
slipped some 0.6 percent.
The falls came after the dollar index strengthened
0.25 percent, rebounding from a three-year low hit, while Brent
crude futures extended the previous day's falls, pulling further
away from the $70 per barrel mark.
Currencies also came under pressure, with Turkey's lira
nursing some of the biggest losses. The lira weakened as much as
0.9 percent in early morning trade with investors' jittery over
flaring geopolitical tensions after the U.S.-led coalition said
on Sunday it would help to build a new Syrian border force,
drawing an angry response from Ankara.
Turkey has warned in recent days of an imminent military
operation in Syria's Afrin region - one of three autonomous
cantons under the control of Kurdish forces and their allies.
The latest flare up adds to the strain on Turkey, which
relies heavily on external financing, is already under pressure
from sluggish growth and double-digit inflation. Turkish stocks
extended losses for a second day.
"In 2018, we expect a visible slowdown in growth and some
easing in inflation and interest rates," Akin Tuzun at VTB
Capital wrote in a note to clients.
"However, it could well be a risky landing on thin ice amid
significant global macro and geopolitical risks."
South Africa's rand and Russia's rouble both
weakened 0.2 percent. The exception to the rule was China's
yuan, which strengthened after the central bank set its firmest
midpoint in more than two years.
Political uncertainties weighed on eastern European
The Romanian leu edged a touch lower, extending
falls for a third day, following the resignation of Prime
Minister Mihai Tudose on Monday as markets await on whether the
replacement candidate will be accepted by the country's
The Czech crown weakened slightly after a minority
government led by Prime Minister Andrej Babis agreed to resign
after losing a vote of no confidence.
For GRAPHIC on emerging market FX performance 2017, see http://tmsnrt.rs/2e7eoml
For GRAPHIC on MSCI emerging index performance 2017, see http://tmsnrt.rs/2dZbdP5
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see)
(Reporting by Karin Strohecker; Editing by Matthew Mpoke Bigg)
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