* U.S. to slap tariffs on European exports
* Turkey’s lira higher after inflation dips to single figures
* Markets in China and South Korea shut for holiday.
By Agamoni Ghosh
Oct 3 (Reuters) - Emerging stocks remained at four-week lows on Thursday as Washington imposed tariffs on European goods, opening a new front in a transatlantic trade war, while a slide in Polish banks stood out after a court ruling on loan compensations.
The United States on Wednesday said it would put 10% tariffs on select European-made Airbus planes and 25% duties on French wine, Scotch and Irish whiskies, and cheese from across the continent.
That fanned fears of a further slowdown in the global economy which is already dealing with after effects of a U.S.-China trade war.
MSCI’s index of emerging market stocks was mostly flat with key Asian markets, China and South Korea shut, while stocks in Hong Kong rose marginally.
Polish banks took a hit after the European Union’s top court ruled in favour of consumers who took out mortgages in Swiss Francs, allowing them to ask Polish courts to convert their loans into the local currency. “The ruling is saying that banks have put unfair terms in the contract and that is a negative,” said Per Hammarlund, Chief EM Strategist at SEB. “On the other hand it is also saying that, there is no provisions in Polish law that can address the problem, so the markets are left a little bit in the unknown here and it depends on what the government plans to do about it.”
Bank shares rose sharply before the ruling on speculation it would favour banks, but lost most of the gains after the decision was published.
Santander Bank Polska fell 8%, Millennium bank shed around 6% and Bank Polski fell 1% among others after the ruling.
Indices in Moscow and Johannesburg fell, while the BIST 100 index in Istanbul rose 1% to outperform after data showed inflation dropped below 10%, down from 15.01% in the previous month.
The September data marked the first time in more than two years that Turkish inflation has dipped into single figures, moving the lira marginally higher.
South Africa’s rand outperformed its emerging market peers to climb 0.8% shrugging off readings that showed private sector activity remained in contraction for a fifth consecutive month in September for Africa’s most industrialised nation.
Markets are also looking forward to the government’s medium-term budget in parliament on Oct. 30, with Finance Minister Tito Mboweni’s speech keenly watched for details about the restructuring of state power firm Eskom and a plan to stimulate growth.
Romania’s leu fell marginally against the euro ahead of its central bank meeting where officials are expected to hold key lending rates at 2.5%.
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For RUSSIAN market report, see (Reporting by Agamoni Ghosh and Sruthi Shankar; Editing by Alison Williams)