December 27, 2018 / 9:21 AM / a year ago

EMERGING MARKETS-Sharp rise on Wall Street buoy emerging stocks

Dec 27 (Reuters) - Emerging markets stock rose on Thursday as positive sentiment from Wall Street’s spectacular rise overnight spilled over, but gains were tempered by China stocks marking their lowest close in four years.

The three major indices on Wall Street closed between 4.96 percent and 5.84 percent higher on Wednesday after a report that holiday sales were the strongest in years allayed some concerns about the health of the economy.

Taking cues, most emerging stock markets rose with Taiwan shares leading gains in Asia with a 1.7 percent rise, while indexes in Russia and Turkey rose 1 percent on average.

Some relief also came as a top White House Council of Economic Advisers said that U.S. Federal Reserve Chairman Jerome Powell’s job was not in jeopardy. His comments came after President Donald Trump described the Fed as the “only problem” in the U.S. economy.

“The market is somewhat upbeat to hear Jerome Powell will not be relieved of his duties, as that would have been a deep negative,” said Chris Weston, Melbourne-based head of research at foreign exchange brokerage Pepperstone.

The MSCI index of emerging market shares rose 0.2 percent to its highest in a week. But, the index trimmed gains as mainland China and Hong Kong shares reversed course and closed sharply lower.

Shares of Sinopec weighed on the Shanghai Composite and Hong Kong indices after Reuters reported that the state-owned oil giant had suspended two top executives at its trading arm. The Shanghai index marked its lowest close since November 2014.

Among emerging market currencies, the South Korean won and the Chinese yuan firmed more than 0.3 percent each, while South Africa’s rand climbed 0.2 percent against a weaker dollar.

Most others declined, with oil exporter Russia’s rouble weakening 0.6 percent as oil prices came off their 8 percent rise in the previous session.

“The muted reaction is due to the lingering uncertainty as to whether we are about to see the last of the volatility introduced by politics in Washington,” Sim Moh Siong, FX strategist at Bank of Singapore said.

The partial shutdown of the U.S. government which is expected to remain in place into January and President Trump’s repeated attacks on the Fed have left investors jittery over the past few sessions.

“Market is still quite wary in terms of U.S. policy uncertainty so unless we see a change in style of leadership, it will keep investors on the sidelines,” Sim added.

For GRAPHIC on emerging market FX performance 2018, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance 2018, see tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Additional reporting by Aditya Soni in Bengaluru; Editing by Raissa Kasolowsky)

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