LONDON Jan 28 Turkish stocks fell for a second
day on Monday as investors worried about banks and the current
account while Egyptian stocks dropped after the government
declared a state of emergency.
Turkish stocks hit a record high on Thursday on the
country's strong growth outlook, but fell 1.4 percent on Monday
to 12-day lows.
"It's certainly our sense that the rally is probably a bit
overdone. And that there are credit problems emerging
particularly in the banking sector," said Neil Shearing at
"We're still worried about the current account deficit. This
might be the first sign that markets are getting a bit worried
Investors were waiting for a teleconference from rating
agency Moody's later on Monday to discuss Turkey "shifting
closer" to investment grade..
Egyptian stocks fell 0.65 percent after the
government declared a month-long state of emergency in three
cities following violent protests against the leadership
. The Egyptian pound tested a new record
Central European stocks in the Czech Republic, Poland and
Romania saw losses and the broader emerging equities index fell
0.43 percent despite strong gains in Chinese stocks.
A 2.4 percent increase in Chinese equities was
driven by comments from a central bank official which were
interpreted as an admission that bank profits should be
protected, as well as positive corporate data out on Sunday
The Romanian leu fell 0.5 percent against the
buoyant euro and the Polish zloty fell a third of a
percent to 4.18.
"The PLN is tactically cheap and (we) would target a move to
below 4.10 against the EUR. For the PLN to do well in the period
ahead, we need to see reassuring news on the domestic macro
front. We also think that the local curve needs to reprice
monetary policy, where too many rate cuts are currently priced
in," a research note from Societe Generale said.
The forint was broadly unchanged, with investors
awaiting Tuesday's central bank meeting which is widely expected
to deliver a sixth consecutive rate cut in a bid to help the