| LONDON, June 6
LONDON, June 6 Emerging stocks inched lower and
currencies softened on Tuesday, as lower oil and commodity
prices and political tensions over a rift between Qatar and
fellow Arab nations dampened risk appetite.
MSCI's emerging market equity benchmark snapped a
three-day winning streak to fall 0.2 percent, with bourses
weakening in Asia , Africa and emerging
Currencies were also on their back foot with commodity
markets under pressure. Iron ore markets suffered and copper
prices dipped for a third straight session, weighed down
by concerns over slowing growth in China and the United States.
"From the bigger picture view, emerging markets just have to
grapple with the new normal, China's growth is half of what it
used to be, that is impacting oil, copper and iron ore," said
Win Thin, global head of emerging market currency strategy at
"The Gulf countries worry about oil, and so does Latin
America. Africa is worrying about iron ore and copper."
Oil prices took another leg lower, now firmly below
the $50 per barrel threshold as the rift between Qatar and
leading Arab powers fuelled concerns that an OPEC-led push to
tighten crude markets looked increasingly frail while soaring
U.S. output added to the woes.
A number of Arab powers - including Saudi Arabia, Egypt, the
United Arab Emirates and Bahrain - severed diplomatic relations
with Qatar, accusing Doha of support for Islamist militants and
Iran, reopening some old festering wounds.
The rift saw Qatar stocks and eurobonds tumble and
the cost of insuring its debt against default rise. The Qatari
riyal, which is pegged to the dollar, weakened against the U.S.
currency in spot and forward markets.
"Looking ahead it really depends on Qatar and Saudi Arabia
getting together and sorting this out, otherwise you can see
repercussions not only for oil but also for countries like
Turkey," said Simon Quijano-Evans, emerging markets strategist
at Legal & General Investment Management.
"There are just too many fires out there at the moment,
which need to be quenched," he added.
"The assumption will be that the pegs continue to hold but
it's another part of that matrix that becomes uncertain."
South Africa's rand snapped a four-day winning streak
to weaken 0.6 percent against the dollar.
Turkey's lira extended losses for a second day,
slipping 0.5 percent, while Mexico's peso retreated after
jumping nearly 2 percent on Monday, after the governing party
clinched a key seat in a state election.
However, China's yuan firmed against the dollar after
the official midpoint was fixed at a near-seven-month high,
shrugging off the central bank's massive $73 billion cash
injection into the financial system to ensure liquidity.
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 1015.15 -2.44 -0.24 +17.73
Czech Rep 1004.40 -3.51 -0.35 +8.98
Poland 2286.06 +10.05 +0.44 +17.36
Hungary 34946.29 -204.15 -0.58 +9.20
Romania 8665.47 -103.94 -1.19 +22.31
Greece 783.56 -3.01 -0.38 +21.74
Russia 1040.37 -3.97 -0.38 -9.72
South Africa 46141.40 -300.67 -0.65 +5.10
Turkey 98008.55 -183.42 -0.19 +25.43
China 3102.33 +10.68 +0.35 -0.04
India 31219.26 -90.23 -0.29 +17.25
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 26.32 26.31 -0.02 +2.63
Poland 4.19 4.18 -0.17 +5.06
Hungary 307.34 307.13 -0.07 +0.48
Romania 4.56 4.56 +0.07 -0.57
Serbia 122.19 122.06 -0.11 +0.95
Russia 56.65 56.59 -0.10 +8.15
Kazakhstan 312.90 313.01 +0.04 +6.63
Ukraine 26.24 26.27 +0.13 +2.92
South Africa 12.77 12.70 -0.56 +7.52
Kenya 103.25 103.30 +0.05 -0.85
Israel 3.54 3.54 -0.04 +8.79
Turkey 3.54 3.52 -0.45 -0.34
China 6.80 6.80 +0.10 +2.16
India 64.41 64.35 -0.10 +5.48
Brazil 3.30 3.30 -0.01 -1.33
Mexico 18.37 18.34 -0.20 +12.76
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 320 3 .02 7 91.07 1
All data taken from Reuters at 09:08 GMT.
Currency percent change calculated from the daily U.S.
close at 2130 GMT.
(Additional reporting by Claire Milhench; editing by Andrew