December 1, 2016 / 10:55 AM / 8 months ago

EMERGING MARKETS-Oil jump and China data lift stocks higher

6 Min Read

By Karin Strohecker
    LONDON, Dec 1 (Reuters) - Emerging market stocks edged
higher on Thursday, but currencies struggled for direction after
manufacturing data painted a mixed picture for developing
economies while the prospect of rising oil prices and a weaker
dollar provided some support.  
    Data from China showed manufacturing in the world's second-
largest economy grew more than expected in November because of
government building projects and a housing boom. 
    Russian manufacturing rose to a five-year high and Poland's
expanded faster than expected, but Turkey's manufacturing, which
makes up around a third of the economy, contracted and South
Korea saw a fourth straight month of declines
   .
    The mood was still being buoyed, though, by gains of nearly
10 percent in oil prices after OPEC agreed its first cut in oil
output since 2008 on Wednesday .
    "China's Purchasing Manager Index coming in stronger than
expected is a key one - China has such a huge impact on emerging
markets, it affects general risk sentiment, and when things look
okay in China that boosts confidence in the rest of emerging
markets," said Per Hammarlund, chief emerging markets strategist
at SEB.
    "Markets are also feeding off yesterday's OPEC decision ...
when sentiment changes for the positive for oil producers, it
tends to lift other emerging markets."
    Russia's rouble continued to benefit from the gains
by oil, adding 0.2 percent to the 2 percent it had jumped
on Wednesday. Moscow dollar-denominated stocks climbed 1
percent to their highest in a year and a half. 
    South Africa's rand strengthened 0.2 percent,
snapping a two-day losing streak, though there was more gloom
for Turkey's lira as it weakened 0.7 percent, retreating
towards the record low it reached last Friday.
    Brazil's real also dropped 0.8 percent after its
central bank trimmed interest rates by 25 basis points
.
    "Last night's 25 basis point rate cut may as well not have
happened," Simon Quijano-Evans, emerging markets strategist at
Legal & General wrote in a note. "The economy clearly needs way
more to support the downside trend with consensus now looking
for only 1 percent GDP next year, and even that looks very
shaky." 
    Across emerging Europe, currencies eased against the euro
despite PMI data showing Czech, Hungarian and Polish
manufacturing picking up pace again after slowing in the third
quarter. They are expected to outstrip growth in the
neighbouring 19-country euro zone .
    
 Emerging Markets Prices from Reuters            
 Equities                  Latest    Net Chg  % Chg  % Chg      
     
                                                     on year    
       
 Morgan Stanley               
 Emrg Mkt Indx    864.37    +1.54   +0.18   +8.84     
       
 Czech Rep            884.98    +3.76   +0.43   -7.46     
       
 Poland           1787.17   -11.05   -0.61   -3.87     
       
 Hungary           30103.43   +89.39   +0.30  +25.85     
       
 Romania           6833.93   +44.43   +0.65   -2.43     
       
 Greece              624.32    -4.43   -0.70   -1.11     
       
 Russia            1043.95   +14.90   +1.45  +37.90     
       
 South Africa    43473.22  -218.20   -0.50   -5.07     
       
 Turkey          72750.45 -1244.74   -1.68   +1.43     
       
 China             3274.07   +24.04   +0.74   -7.49     
       
 India           26553.97   -98.84   -0.37   +1.67     
       
            
 Currencies              Latest    Prev    Local    Local       
      
                                   close   currency currency    
       
                                           % change % change    
       
                                                    in 2016     
      
 Czech Rep      27.05     27.02   -0.09    -0.19      
     
 Poland          4.46      4.45   -0.22    -4.54      
     
 Hungary       313.11    312.37   -0.24    +0.49      
     
 Romania         4.52      4.50   -0.44    +0.07      
     
 Serbia        123.05    122.96   -0.07    -1.28      
     
 Russia            64.03     64.08   +0.08   +13.94      
     
 Kazakhstan       339.67    339.67   +0.00    +0.24      
     
 Ukraine           25.65     25.52   -0.51    -6.62      
     
 South Africa      14.05     14.08   +0.25   +10.09      
     
 Kenya            101.75    101.70   -0.05    +0.44      
     
 Israel             3.83      3.83   -0.03    +1.50      
     
 Turkey             3.46      3.44   -0.73   -15.73      
     
 China              6.89      6.88   -0.13    -5.81      
     
 India             68.35     68.59   +0.34    -3.16      
     
 Brazil             3.41      3.38   -0.83   +16.07      
     
 Mexico            20.57     20.57   -0.02   -16.54      
     
            
 Debt                 Index   Strip Spd  Chg   %Rtn   Index     
       
 Sov'gn Debt  EMBIG   383        -4    .04  7 28.30 1   
        
            
 All data taken from Reuters at 10:13 GMT. Currency percent
change calculated from the daily U.S. close at 2130 GMT.
    
        
For GRAPHIC on emerging market FX performance 2016, see tmsnrt.rs/2e7eoml

For GRAPHIC on MSCI emerging index performance 2016, see tmsnrt.rs/2dZbdP5
    
    For CENTRAL EUROPE market report, see 
    For TURKISH market report, see 
    For RUSSIAN market report, see )

 (Additional reporting by Claire Milhench, editing by Larry
King)

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