By Asher Levine and Sujata Rao
RIO DE JANEIRO/LONDON Feb 12 Emerging market
stocks rose to three-week highs on Wednesday, boosted by
stronger-than-expected Chinese trade data but Brazilan stocks
dipped on profit-taking after recent gains.
China's January exports and imports easily beat forecasts,
data showed Wednesday, easing concerns over a slowdown in the
world's second-largest economy. China is a key purchaser of raw
materials such as iron-ore, soybeans and copper from other
"Surprisingly strong export growth from China last month has
raised hopes of a broader recovery in emerging market exports,"
Capital Economic wrote in an investor note.
Emerging market equities advanced nearly 1 percent
, with Chilean stocks notching their seventh
straight gain and Russian shares up 0.8 percent.
Mexico's IPC index advanced 0.2 percent, boosted by
telecommunications firm America Movil, which beat
fourth-quarter profit estimates late Tuesday.
The country's peso was little changed ahead of the
central bank's inflation report, due later in the day.
"As much as we like the Mexican story, data has been coming
very soft and calls into question the central bank's scenario
for a stronger recovery this year," Brown Brothers Harriman
strategists wrote on Wednesday.
Brazilian shares, which tend to track the outlook
for Chinese growth, retreated 0.3 percent, turning lower after a
1.6 percent rally in the previous session.
Brazilian stocks advanced in the three of the four past
sessions. But underlying confidence in the local market has
remained low due to a weak outlook for domestic economic growth,
with gains typically short-lived.
The Brazilian currency, the real, was also 0.3
percent lower against the dollar.
Earlier in Asia, the Korean won led currency gains, rising
to one-month highs, while the Thai baht
strengthened 0.6 percent.
Ilan Solot, emerging markets strategist at Brown Brothers
Harriman in London said markets were "tired of selling".
Emerging stocks fell 6.6 percent in January and most
emerging currencies are in the red against the euro and dollar.
"There has been a significant build-up of short positions
and at any sign of improvement you will see a short-covering
type of rally," Solot said.
In Europe, Hungary's forint gave up early gains to
trade slightly weaker against the dollar, while the Budapest
stock market dropped over 1 percent, led by a fall in Hungary's
biggest bank, OTP.
The losses come after the European Court of Justice issued a
legal opinion that could clear the way for Hungarian courts to
rule on whether some aspects of the foreign currency loans that
banks issued locally breached the law.
The government has pledged new steps to help households who
are burdened with Swiss franc and euro mortgages though its
earlier measures saddled the banking sector with big losses.
In the former Soviet Union, Kazakhstan's tenge traded nearly
flat, a day after the central bank devalued it by 19 percent
to the mid-point against the dollar.
The Ukrainian hryvnia fell 0.5 percent and the rouble
eased a touch . Russia's central bank again
lowered the corridor in which the currency trades, having
shifted it almost 30 times this year.
Further depreciation pressure is likely on the currency
which analysts say looks uncompetitively valued against trade
partners Russia and Kazakhstan and is weighed down by political
turmoil and the suspension of a $15 billion loan from Russia.
"The risk of sharp currency losses is largest in Ukraine,
even in an scenario where the authorities return to the deal
with Russia," Unicredit analysts told clients.
They also expect the rouble to fall, but at a slower pace.
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see )