Aug 1 Russia's debt insurance costs rose to
their highest since early May and the country's stocks fell on
Friday after the European Union announced the details of its
sanctions on Moscow.
Broader emerging stocks hit 12-day lows, with further
weakness coming after the U.S. Federal Reserve sounded more
hawkish on interest rates earlier this week, taking the shine
off higher-yielding assets.
Russia's top lender Sberbank dropped 2.4 percent
down, while shares in Russia's second-largest bank VTB
fell 4 percent, hit by EU sanctions restricting their access to
foreign capital over Moscow's role in Ukraine.
Index compiler MSCI said it was consulting investors over
deleting VTB from the MSCI Russia index.
Moscow's dollar-denominated RTS index fell nearly
1.7 percent, and its rouble-traded MICEX dropped 1.3
Russia's 5-year credit default swaps rose 6 basis points to
243 bps, their highest since early May, according to Markit.
The rouble was stable against the dollar, however.
"We will still have to see over time how big the impact will
be," said Thu Lan Nguyen, an emerging markets analyst at
Commerzbank, adding that "there was a little bit of relief that
the sanctions were not even tougher - the rouble is holding its
ground quite well."
The MSCI emerging stocks index fell nearly 1
percent to 12-day lows after testing a three-year high earlier
this week, and was on course for a loss of more than 2 percent
Markets were also nervous ahead of key U.S employment data
later on Friday.
Central European currencies and stocks also extended recent
losses, with the zloty hitting a 10-week low against the euro
as Poland's manufacturing activity shrank and the
country said the impacts of Russia's crisis cut its growth.
Argentina's dollar discount bond due 2033
fell more than 2 points to 86 after the country defaulted late
on Wednesday for the second time in 12 years.
A fresh U.S. hearing over the debt dispute between Argentina
and holdout investors has been scheduled for Friday.
"The market seems to believe that they can reach agreement,
but it will not be immediate, probably for the start of 2015,"
said Olivier De Timmerman, a fixed income fund manager at
Luxembourg-based KBC Asset Management.
The Turkish lira slipped to a 1-1/2 month low against
the dollar after weaker than expected manufacturing PMI and a
drop in exports to Iraq, the country's major trading partner.
Bulgaria's debt insurance costs rose by 2 bps to 130 bps,
their highest since July 8, according to Markit.
Bulgarian bank Corpbank's dollar bond due Aug 8
rose 2 points but remained in deeply distressed
territory at a bid price of 30, on expectations of a default
For GRAPHIC on emerging market FX performance 2014, see link.reuters.com/jus35t
For GRAPHIC on MSCI emerging index performance 2014, see link.reuters.com/weh36s
For GRAPHIC on MSCI emerging Europe performance 2014, see link.reuters.com/jun28s
For GRAPHIC on MSCI frontier index performance 2014, see link.reuters.com/zyh97s
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see )
(Additional Reporting by Andrew Winterbottom; Editing by Toby