LONDON May 8 Emerging equities rose towards a
one-week high on Monday and Eastern European currencies firmed
against the euro in a broad relief rally after centrist
candidate Emmanuel Macron's emphatic victory in the French
Business-friendly Macron scooped over 60 percent of the
vote, defeating far right nationalist Marine Le Pen who had
threatened to take France out of the European Union.
Eastern European currencies strengthened following the
result, as Macron's victory removed the Le Pen threat to EU
structural fund transfers to big recipients Poland and Hungary.
The Polish zloty led the pack, gaining up to 0.5
percent in early trade against the euro to test 20-month highs.
The Czech crown firmed 0.2 percent to hit its firmest
level in a month and the Hungarian forint held steady
near two-week highs.
But Piotr Matys, an emerging FX strategist at Rabobank, said
scope for further gains was likely to prove limited given this
outcome had been fully priced in.
"In fact, the CEEs may soften against the U.S. dollar in the
coming days," he said in a note.
MSCI's benchmark emerging stocks index gained 0.7
percent, helped by a strong performance in Asia where South
Korean and Indonesian bourses hit record highs, up 2.3
percent and 0.6 percent respectively.
However, Chinese mainland shares retreated
0.8 percent to four-month lows, hindered by investor fears over
tightening regulations .
Bourses in emerging Europe also suffered. Polish
shares fell 0.4 percent, dragged lower by a 3 percent
tumble in copper producer KGHM thanks to falling prices
in the industrial metal.
Copper prices fell to their lowest in four months after the
latest trade data from China - the world's top consumer of the
metal - showed imports of concentrate and ore fell in April from
the previous month amid a subdued outlook for industrial
activity. However, they rose compared to a year earlier.
The data also weighed on commodity currencies, together with
oil prices remaining well remain below $50 a barrel due
to a persistent glut.
The Russian rouble slipped 0.3 percent against the
dollar and the South African rand eased 0.5 percent.
"The market is just pulling back," said Cristian Maggio,
head of emerging markets strategy at TD Securities, adding that
some of the optimism in emerging markets that had developed
after the French presidential first-round vote was now
"Some of the names that have been benefiting quite a bit –
the rand, the lira, and to some extend the rouble, which remains
overvalued – are all pulling back."
China's yuan was steady on the day as data showed
foreign exchange reserves had risen for a third straight month
in April, beating market expectations as capital controls and a
pause in the dollar's rally helped stem capital outflows.
Julian Evans-Pritchard, an economist at Capital Economics,
said capital outflows could pick up in coming quarters, but the
renminbi was now closer to fair value than a couple of years
ago, and with the bulk of the dollar's appreciation behind it,
he did not expect outflows to get out of control.
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 985.47 +7.20 +0.74 +14.29
Czech Rep 1005.94 +4.19 +0.42 +9.15
Poland 2372.28 -9.89 -0.42 +21.79
Hungary 32723.17 -140.87 -0.43 +2.25
Romania 8252.06 -46.59 -0.56 +16.47
Greece 754.27 +0.28 +0.04 +17.19
Russia 1085.68 +4.46 +0.41 -5.78
South Africa 47028.36 +18.57 +0.04 +7.12
Turkey 94432.88 +504.49 +0.54 +20.85
China 3076.79 -26.25 -0.85 -0.87
India 29961.42 +102.62 +0.34 +12.52
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 26.69 26.72 +0.11 +1.17
Poland 4.20 4.21 +0.14 +4.79
Hungary 311.53 311.52 -0.00 -0.87
Romania 4.54 4.55 +0.10 -0.20
Serbia 123.02 123.02 +0.00 +0.27
Russia 58.11 57.91 -0.34 +5.43
Kazakhstan 318.41 318.41 +0.00 +4.79
Ukraine 26.49 26.49 +0.00 +1.93
South Africa 13.48 13.42 -0.44 +1.90
Kenya 103.10 103.00 -0.10 -0.71
Israel 3.60 3.59 -0.35 +6.95
Turkey 3.55 3.54 -0.15 -0.61
China 6.90 6.90 -0.01 +0.58
India 64.22 64.30 +0.12 +5.80
Brazil 3.18 3.18 +0.02 +2.45
Mexico 18.94 18.99 +0.27 +9.38
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 321 0 .04 7 78.84 1
(Additional reporting by Karin Strohecker, editing by Ed