| LONDON, April 11
LONDON, April 11 Emerging stocks slipped to
three-week lows and were set for their longest losing streak of
the year as tensions stemming from Syria and North Korea kept
investors away from riskier assets, although Russia's rouble
firmed off recent lows.
MSCI's benchmark emerging stocks index fell 0.2
percent and was on track for its fourth session of losses,
having sold off in the wake of the U.S. attack on a Syrian air
base and hardening attitudes towards North Korea.
The White House said U.S. President Donald Trump was open to
authorising additional strikes on Syria and pressure is building
on Russia to break its ties with Syrian President Bashar
But Russian dollar-denominated stocks rebounded over
1 percent from three-week lows after a sharp sell-off in the
aftermath of the U.S. missile strike, while the Russian rouble
firmed 0.5 percent against the dollar, off two-week lows.
Cristian Maggio, head of emerging markets strategy at TD
Securities, said the rouble had been trading too strongly
relative to oil prices ahead of the U.S. strike on
Syria, and this had triggered an overdue correction.
"The rebound today is a rubber band effect," said Maggio.
"The move from Trump in Syria put the U.S. on a frontal
crash course with Russian interests. Some of the optimism of the
market in seeing a normalisation of international relations
between Western countries and Russia has started to evaporate."
Investors were also eyeing tensions in Asia. China and South
Korea have agreed to impose tougher sanctions on North Korea if
it carries out nuclear or long-range missile tests, as a U.S.
Navy strike group heads to the region in a show of force.
South Korean assets bore the brunt of the regional selling
with stocks down 0.4 percent to one-month lows in their
sixth straight session in the red. The South Korean won
also weakened 0.2 percent to three-week lows after falling more
than 1 percent last week. Hong Kong shares fell 0.7
Yet some emerging currencies that have suffered in recent
sessions steadied against the dollar.
The South African rand firmed 0.5 percent, off the
three-month lows reached after the country's credit rating was
downgraded by two ratings agencies to 'junk'. The central bank
governor said it was too early to tell if the downgrades would
push the economy into recession.
The rand has weakened nearly 12 percent since March 27 when
President Jacob Zuma recalled Finance Minister Pravin Gordhan
from an investor roadshow, before sacking him.
The Turkish lira firmed 0.2 percent, off near
one-month lows hit on Friday, after its current account deficit
narrowed to $2.527 billion in February, more than forecast.
Turkey's referendum on constitutional change will be held on
April 16 but is thought unlikely to kickstart long stalled
market reforms even if it passes.
Maggio said he expected the yes vote to prevail by a small
margin, which would be negative for the lira. If Turkey voted
no, he expected the lira to strengthen.
"But you may have another election or a retry of this
referendum, and the political landscape will remain extremely
polarised and contentious," he said.
The Polish zloty weakened 0.2 percent and the
Czech crown slipped 0.3 percent against the euro.
Volatility gauges for both remain at
multi-month highs, with traders taking out insurance bets ahead
of France's upcoming election.
In Serbia, central bank policy makers are expected to keep
rates unchanged at 4 percent.
In bond markets, Saudi Arabia set initial price guidance for
its planned U.S. dollar-denominated debut sukuk expected to be
the biggest ever such issue, beating the $4bn that Qatar raised
For GRAPHIC on emerging market FX performance 2017, see tmsnrt.rs/2e7eoml
For GRAPHIC on MSCI emerging index performance 2017, see tmsnrt.rs/2dZbdP5
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see)
Emerging Markets Prices from Reuters
Equities Latest Net Chg % Chg % Chg
Emrg Mkt Indx 956.42 -1.58 -0.16 +10.92
Czech Rep 992.65 +3.82 +0.39 +7.71
Poland 2244.57 +0.55 +0.02 +15.23
Hungary 32572.34 +104.04 +0.32 +1.78
Romania 8222.08 +7.27 +0.09 +16.05
Greece 680.39 -1.07 -0.16 +5.71
Russia 1092.91 +8.65 +0.80 -5.16
South Africa 46661.47 +238.98 +0.51 +6.29
Turkey 91092.64 -147.81 -0.16 +16.58
China 3288.19 +18.80 +0.58 +5.95
India 29766.34 +190.60 +0.64 +11.79
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 26.68 26.61 -0.27 +1.24
Poland 4.24 4.23 -0.22 +3.89
Hungary 311.46 311.05 -0.13 -0.85
Romania 4.51 4.51 -0.08 +0.53
Serbia 123.69 123.78 +0.07 -0.27
Russia 56.97 57.22 +0.44 +7.54
Kazakhstan 311.25 312.26 +0.32 +7.20
Ukraine 26.87 26.87 +0.00 +0.48
South Africa 13.85 13.94 +0.63 -0.86
Kenya 103.25 103.30 +0.05 -0.85
Israel 3.66 3.66 -0.10 +5.25
Turkey 3.72 3.73 +0.27 -5.16
China 6.90 6.90 -0.03 +0.61
India 64.43 64.58 +0.24 +5.46
Brazil 3.13 3.13 -0.04 +3.85
Mexico 18.72 18.67 -0.27 +10.63
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 331 2 .06 7 71.28 1
(Editing by Louise Heavens)