adminLONDON. – Emerging market stocks edged higher yesterday with Chinese mainland shares racing ahead as dire data prompted bets that Beijing will roll out more stimulus, while currencies came under pressure from lower oil prices and a buoyant dollar.
MSCI’s broadest emerging market stock index rose 0,3 percent. China mainland stocks ending almost 5 percent higher, the biggest daily gain since early July after gloomy trade and inflation data reinforced expectations of more support measures for the economy .
But many major emerging currencies weakened, dragged down by the dollar index edging higher, weaker oil prices and local factors. The Turkish lira extended Friday’s fall, easing 0,3 percent against the dollar as a fresh spate of violence hit the country.
In Istanbul, two attackers opened fire on the US consulate building while 10 people were injured in a car bombing at a police station overnight. Four police officers were killed in a blast in southeastern town of Silopi while a soldier died after Kurdish militants opened fire on a helicopter.
Turkey also has no government after the ruling AK Party lost its majority at the polls in June with coalition talks progressing very slowly.
“We still think that markets may be underestimating the risks emanating from the political situation, which is both geopolitical and domestic,” Ilan Solot, strategist at Brown Brothers Harriman, wrote in a note to clients.
Turkish stocks extended Friday’s losses, falling around 1 percent.
South Africa’s rand snapped a two-day winning streak to slip 0,5 percent against the greenback, though trading was thin with South African markets closed for a national holiday.
Coming under pressure from falling Brent crude prices, Russia’s rouble fell 0,7 percent – its fourth straight session in the red and nearing a five-month low. Dollar-denominated Moscow stocks fell 1,3 percent, while their rouble counterparts slipped 0,5 percent .
Argentinian eurobonds were broadly unmoved after Sunday’s presidential primary in which ruling party candidate Daniel Scioli looked to have come first according to early results, with voters favouring the Buenos Aires governor’s policy of gradual change after eight years of leftist government.
Mauricio Macri, the business-friendly mayor of Buenos Aires, was lying second.
In eastern Europe, currencies and stock markets were mixed. The Czech crown edged up to 27,02 against the euro after annual inflation data showed a slowdown in July, adding weight to the central bank’s weak crown policy.
The Polish zloty fell 0,36 percent against the euro while stocks in Warsaw gained 0,3 percent, rebounding after first-half earnings at the country’s biggest lender PKO BP fell less than expected. – Reuters.
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