LONDON Oct 19 Emerging stocks edged higher on
Wednesday after data from China showed the world's second
largest economy grew as expected last quarter, though curriences
were largely unmoved by this with only Turkey's lira bouncing
off a record low.
A raft of data showed China's economy grew 6.7 percent in
the third quarter - in line with expectations - and looks set to
hit Beijing's full-year target, thanks to stronger government
spending, record bank lending and a red-hot property market. Yet
this also adds to a growing debt pile and a separate set of data
showed industrial output grew less than expected.
MSCI's emerging markets benchmark added 0.3
percent to Tuesday's 1.5 percent jump, lifted by gains in Russia
, central and eastern Europe and select
Asian bourses such as Taiwan.
Yet stocks in mainland China and Hong Kong
came under some pressure, trading flat to lower.
The cautiously supportive numbers were bound to set the tone
for the rest of the week, said Cristian Maggio, head of EM
strategy at TD Securities.
"The fact that (the data) came in line with expectations is
neutral, but it removes the risk of weaker growth," said Maggio.
"That gives the rest of emerging markets the liberty to focus on
different aspects, and the move seems to be positive."
However, the Chinese economy data provided little
inspiration to currencies.
Russia's rouble traded unchanged against the dollar,
also shrugging off oil prices jumping 1.5 percent on the
back of a drop in U.S. crude inventories and declining
production in China.
South Africa's rand reversed earlier losses to
struggle 0.1 percent higher in its third day of gains after data
showed the country's headline consumer inflation quickened to
6.1 percent year-on-year in September.
Analysts were divided if that could lead to a rate hike in
November given the fragile state of the overall economy.
"The (central) bank will probably 'look through' this very
slight breach of the target, as it has done several times in the
past," Capital Economics wrote in a note to clients.
"Given the weakness of the economy, policymakers may wish to
hold fire rather than risk damaging the very fragile economy."
Turkey's lira, which has weakened more than 5 percent
against the dollar since the start of the year, chalked up some
of the biggest gains, rising 0.6 percent and pulling away from
recent record lows. Policymakers at the central bank, which
meets again on Thursday, have been under pressure from the
government to cut rates.
"There is a common perception the Turkish central bank will
stop cutting rates soon," Luis Costa at Citi wrote in a note to
clients. "Maybe after the next 25 basis points cut in the
Policymakers at Brazil's central bank meeting later in the
day are expected to deliver their first cut in interest rates in
four years in a bid to kickstart Latin America's biggest
economy. Brazil's rates are currently some of the
highest in the world at 14.25 percent.
Investors were also awaiting pricing on Saudi Arabia's
bumper debut bond sale, which could be between $10-$20 billion,
one of the largest of any emerging economy.
Emerging Markets Prices from Reuters
Equities Latest Net Chg % Chg % Ch
Emrg Mkt Indx 912.12 +3.57 +0.39 +14.86
Czech Rep 916.75 +1.42 +0.16 -4.14
Poland 1725.46 +4.25 +0.25 -7.19
Hungary 29077.29 +64.61 +0.22 +21.56
Romania 6857.55 +13.08 +0.19 -2.10
Greece 595.76 +1.93 +0.33 -5.64
Russia 992.86 +5.92 +0.60 +31.15
South Africa 44898.60 +355.48 +0.80 -1.96
Turkey 78825.19 +484.79 +0.62 +9.90
China 3085.32 +1.45 +0.05 -12.82
India 28048.64 -2.24 -0.01 +7.39
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 27.01 27.00 -0.03 -0.05
Poland 4.31 4.31 -0.08 -1.30
Hungary 306.39 306.55 +0.05 +2.69
Romania 4.50 4.50 +0.16 +0.53
Serbia 123.09 123.08 -0.01 -1.32
Russia 62.42 62.47 +0.07 +16.86
Kazakhstan 331.55 332.20 +0.20 +2.70
Ukraine 25.65 25.63 -0.08 -6.62
South Africa 13.92 13.89 -0.20 +11.06
Kenya 101.30 101.20 -0.10 +0.89
Israel 3.83 3.82 -0.16 +1.58
Turkey 3.07 3.09 +0.69 -5.08
China 6.74 6.74 +0.05 -3.63
India 66.66 66.72 +0.09 -0.69
Brazil 3.19 3.19 -0.02 +24.20
Mexico 18.58 18.61 +0.14 -7.59
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 365 0 .08 7 63.84 1
All data taken from Reuters at 09:13 GMT.
Currency percent change calculated from the daily U.S. close at
For GRAPHIC on emerging market FX performance 2016, see link.reuters.com/jus35t
For GRAPHIC on MSCI emerging index performance 2016, see link.reuters.com/weh36s
For GRAPHIC on MSCI emerging Europe performance 2016, see link.reuters.com/jun28s
For GRAPHIC on MSCI frontier index performance 2016, see link.reuters.com/zyh97s
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see )
(Additional reporting by Claire Milhench; Editing by Raissa