August 16, 2019 / 9:11 AM / 3 days ago

EMERGING MARKETS-Emerging market stocks snap five-session losing run, currencies firm

* MSCI’s EM stocks index rises; stimulus hopes help Chinese stocks

* Hong Kong equities add 0.9%, gaining for third straight session

* CEE currencies broadly firm against euro

By Aaron Saldanha

Aug 16 (Reuters) - Emerging market stocks gained on Friday for the first time in six sessions, helped by hopes of further stimulus in China, a factor which also helped developing world currencies hold their ground against the dollar.

China’s state planner said it would roll out a plan to boost disposable income and spur consumption in the world’s second-largest economy, helping the benchmark Shanghai SE Composite index and the blue-chip Shanghai Shenzhen CSI 300 to rise 0.3% and 0.5% respectively.

The sentiment played into a 0.3% rise seen in MSCI’s developing world stocks index, with the benchmark on track to post gains for only the second time in 18 trading days.

Morten Lund, an analyst at Nordea Markets, said the stimulus would also benefit currencies of countries closely linked with China’s supply chain, especially those in Asia, though the possibility of a weaker yuan had to be kept in mind.

“We think USD/CNY is an extremely important sentiment gauge ... if it goes beyond 7.3 (yuan per dollar), we will go from a risk-off situation to a complete panic!,” Lund said.

MSCI’s emerging market currencies index ticked 0.1% higher, although China’s yuan softened 0.1%.

Taiwanese equities added 0.9%. Hong Kong-traded stocks also gained 0.9%, rising for a third straight session.

Turkey’s lira was 0.5% firmer on bearish technical factors for the USD/TRY pair, while stocks rose 0.2%.

Data earlier in the day showed industrial production in the country fell 3.9% year-on-year in June, logging its tenth consecutive month of decline after the economy tipped into recession last year.

Russia’s rouble strengthened 0.2%, while stocks advanced 0.3%, aided by a 1.6% rise in the price of oil , a key Russian export, which aided energy companies listed in Moscow.

South Africa’s rand strengthened 0.6% while equities fell 0.3%.

Petrochemicals firm Sasol shed about 13% after it delayed the release of its annual results due to possible “control weaknesses” at its U.S. ethane cracker project.

Emerging European currencies were broadly firmer against the euro, with Poland’s zloty 0.4% stronger against the common currency, while Hungary’s forint was 0.2% firmer.

Nordea Markets’ Lund said he prefers central and eastern European currencies to their Asian and Latin American peers, despite worries regarding the euro zone economy and risks arising from Brexit.

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Aaron Saldanha in Bengaluru Editing by David Holmes)

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