* EM stocks resilient as compared to developed world peers
* U.S. Q3 GDP, ECB meeting awaited
* Turkish lira down 4.4% this week
Oct 29 (Reuters) - Turkey’s lira sank for a sixth straight session on Thursday, leading losses in Europe, Middle East and Africa, after new coronavirus lockdowns in Europe rattled sentiment and spurred widespread selling across risk-driven assets.
France and Germany, Europe’s biggest economies, announced lockdowns on Wednesday due to a resurgence in infections, causing steep declines in global stock markets and currencies. The dollar also strengthened on safe-haven inflows.
“The sharp fall in economic activity in the second quarter was not only driven by the lockdowns but also by supply chain disruptions and fading external demand,” Carsten Brzeski, global head of macro at ING wrote in a note.
“The risk that at least the rest of Europe will follow Germany, France and Ireland is high.”
Turkey’s lira fell 0.5%, extending a losing streak it has seen since the central bank held its benchmark rate last week. Trading in the country was muted on account of a public holiday.
The South African rand came off early gains to trade flat. It took little support from a government pledge to freeze public sector wages for the next three years to contain a yawning budget deficit, as the government also forecast high debt levels.
South African stocks rose about 0.7%, while the MSCI’s index of emerging market equities fell 0.3%.
Still, losses in the index were much lesser than its peers in the developed world, thanks to support from Chinese blue-chip stocks.
Central European currencies, such as the Hungarian forint and the Polish zloty, were muted to the euro ahead of an interest rate decision from the European Central Bank (ECB).
“What the ECB and governments need to do is make sure that businesses with a future are still solvent at the end of the restrictions, to allow the economy to grow,” said Paul Donovan, chief economist of UBS Global Wealth Management.
“Changing the cost of credit does little or nothing to achieve that.”
Investors were also awaiting U.S data, which is expected to show the economy experienced record growth in the third quarter as consumer spending was boosted by more than $3 trillion in federal pandemic relief aid.
Elsewhere, ratings agency S&P spared Colombia from a junk rating, affirming its rating at “BBB/A-3”, but still forecast economic uncertainty due to the pandemic.
The Colombian peso did not react to the news, as it came outside trading hours. For GRAPHIC on emerging market FX performance in 2020, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2020, see tmsnrt.rs/2OusNdX
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For RUSSIAN market report, see (Reporting by Ambar Warrick in Bengaluru; Editing by Amy Caren Daniel)