| LONDON, June 16
LONDON, June 16 Emerging market stocks were
heading for their biggest weekly fall of the year on Friday,
though Russia, one of the biggest losers of the week, steadied
along with oil prices.
Russian stocks rose 0.6 percent off Thursday's
16-month lows, but are down 3 percent so far this week, their
worst weekly performance since mid-April.
The rouble also firmed 0.2 percent against the dollar
after dipping to one-month lows on Thursday, but was down over 1
percent this week.
The sell-off was triggered by U.S. lawmakers moving to
impose new sanctions on Russia and force President Donald Trump
to get the approval of Congress before easing any existing
Oil's price fall to six-month lows compounded
But as oil edged higher on Friday, the rouble found a floor,
ahead of a Russian central bank meeting which is expected to cut
interest rates by 50 basis points.
"The reason we expect a 50 bps cut is inflation fell to
their target in May, and so far signs from the first quarter are
that domestic demand is still soft and they have room to cut,"
said Kiran Kowshik, a strategist at UniCredit.
"But it's possible they could do 25 bps given how oil is
trading," he said, adding that either outcome was fine for the
rouble due to the pace of disinflation.
MSCI's emerging markets stocks index was steady
near three-week lows hit on Thursday with gains in some
European markets such as Hungary and Poland
offsetting earlier losses in Asia.
Chinese mainland shares fell 0.3 percent, ending
the week down 1.6 percent, the first weekly fall since early May
as weak producer inflation and investment data have reinforced
concerns of a renewed slowdown in the world's No.2 economy.
The yuan was set for its worst week since
early-March, after the central bank fixed its official guidance
Hong Kong stocks closed slightly up but have lost
1.6 percent for the week, their biggest fall in three months.
Kowshik said that as fiscal stimulus promised by U.S.
President Donald Trump had been delayed, there had been some
selling in emerging assets that would have benefited from such
He cited South Korea, where the won fell as much as 1.2
percent before the central bank was suspected of
intervening. The won ended at five-week lows.
U.S. Federal Reserve signals that it may begin reducing its
holdings of bonds and other securities this year is also a
negative for emerging markets
"The bad news for emerging markets is the Fed tapering
announcement, which many people were not expecting this week,"
Kowshik said. "It suggests there is a limit to how much U.S.
yields can fall."
The Turkish lira weakened 0.2 percent against the
dollar. The central bank left its key interest rate on hold on
Thursday, despite high inflation.
South Africa was closed for a public holiday but stocks
ended the week down almost 3 percent, their worst
performance since December.
Mining stocks sold off hard on Thursday when the government
revamped the sector's ownership rules.
In central Europe, the Romanian leu reached a near five-year
low against the euro after the ruling coalition said
it would seek to topple Prime Minister Sorin Grindeanu next
But the Serbian dinar hovered near a 17-month high
hit on Thursday after the president nominated Ana Brnabic as the
country's first woman prime minister. She is not
affiliated with any party.
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 1003.66 +0.02 +0.00 +16.40
Czech Rep 1000.82 +4.08 +0.41 +8.59
Poland 2302.66 +6.67 +0.29 +18.21
Hungary 35692.03 +157.53 +0.44 +11.53
Romania 8427.80 +21.51 +0.26 +18.95
Greece 809.47 +9.74 +1.22 +25.76
Russia 998.64 +6.68 +0.67 -13.34
South Africa 44512.15 -572.71 -1.27 +1.39
Turkey 98766.28 +29.26 +0.03 +26.40
China 3122.86 -9.62 -0.31 +0.62
India 31119.49 +43.76 +0.14 +16.87
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 26.21 26.24 +0.10 +3.03
Poland 4.22 4.23 +0.24 +4.39
Hungary 307.63 307.79 +0.05 +0.39
Romania 4.58 4.58 +0.08 -0.97
Serbia 121.97 122.07 +0.08 +1.13
Russia 57.74 57.85 +0.19 +6.11
Kazakhstan 320.26 317.86 -0.75 +4.18
Ukraine 26.02 26.01 -0.04 +3.77
South Africa 12.83 12.86 +0.25 +7.00
Kenya 103.45 103.30 -0.14 -1.04
Israel 3.53 3.53 -0.04 +9.19
Turkey 3.52 3.51 -0.16 +0.26
China 6.81 6.81 -0.11 +1.89
India 64.49 64.54 +0.09 +5.36
Brazil 3.27 3.27 +0.00 -0.64
Mexico 17.99 18.05 +0.33 +15.17
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 321 -1 .01 7 90.67 1
(Additional reporting by Sujata Rao: editing by Elaine