LONDON Nov 13 Emerging stocks hit two-month
lows on Tuesday on fears Greece would not receive an aid tranche
before an end-week debt deadline, while rate cut signals pushed
the zloty and lira to multi-week lows.
International lenders are wrangling over disbursing the next
tranche of Greek aid that the country hoped to use to refinance
5 billion euros of debt by Friday..
"We are again left with the Greece story weighing on
markets. Basically the momentum for emerging markets is
externally driven," said Murat Toprak, emerging markets
strategist at HSBC in London.
"On currencies we have weakness on back of the risk-off mood
and on back of policy measures. Turkey is a classic example of a
country that doesn't want to see its currency strengthening," he
said, citing the dovish Turkish central bank comments on Monday.
Emerging shares fell almost 1 percent, led by
Shanghai which slumped 1.5 percent to seven-week lows after
state media reported that curbs on housing markets would stay.
Moscow stocks slumped 1.2 percent as crude prices
fell under $109 a barrel. The rouble touched two-month lows
versus the dollar, hit also by weak growth data that
makes more central bank rate rises less likely.
The Turkish lira fell 0.3 percent, adding to Monday's
0.6 percent losses after Governor Erdem Basci threatened a rate
cut. Bonds were steady after yields hit record lows on Monday.
The Polish zloty likewise touched new two-month lows after a
rate cut this month and signs of more to come. The
Czech crown was flat after three weeks of losses.
David Sykora, a trader at CSOB bank in Prague said long euro
versus crown was the preferred trade.
"I can hardly imagine a reason to hold the crown. Rates are
at zero, the central bank has said it wants the crown to be weak
and data coming from the economy is rather gloomy," he said.