LONDON, Aug 18 (Reuters) - Emerging stocks and some currencies ended the week on a sour note as investors fretted over U.S. political turmoil on Friday, but many assets were still in line for solid weekly gains.
MSCI's emerging market index eased 0.4 percent as Asian stocks tracked a steep overnight selloff on Wall Street .
The losses were caused by doubts that President Donald Trump can deliver promised tax cuts and stimulus as rumours swirled that chief economic adviser Gary Cohn would resign and business leaders deserted the administration over Trump's handling of white supremacist violence.
Confidence was shaken further after a van ploughed through crowds in Barcelona on Thursday, killing at least 13 people and injuring more than 100 in what police suspect was one of a planned wave of Islamist militant attacks.
"Risk aversion dominates the global market overnight after the terror attack in Barcelona," Commerzbank wrote in a note.
"Risk-off is also triggered by the rumour that Trump's main economic adviser Gary Cohn was set to quit in disgust at the president's response to the Charlottesville racial violence."
However, solid gains at the start of the week meant emerging stocks were on track for a 1.5 percent weekly gain - the best in a month. China mainland stocks enjoyed some of the steepest gains, with the Shanghai Composite on track for a near 2 percent rise - its best week since early April.
Indexes in Seoul, Johannesburg and Moscow were all poised for weekly rises.
On currency markets, Mexico's peso, China's yuan , Russia's rouble and Turkey's lira weakened on the day against a softer dollar.
Yet South Africa's rand was in line for sharp weekly gains, adding 1.6 percent after Moody's delayed its ratings decision last Friday and a court affirmed the central bank's mandate on Tuesday.
While the dash for defensive assets has weighed down Treasury yields, emerging dollar debt yield spreads have also come in by 4 basis points from last Friday's close to 307 bps.
"In spite of the recent dovish newsflow, it is too early to count the Fed out for December," Citi's Dirk Willer wrote in a note to clients referring to expectations of a rate rise.
"Investors may therefore stay long emerging markets rates for longer, while waiting for an upside inflation surprise."
In other news, data out of China showed home price growth slowed in July, reinforcing expectations that property price growth in the world's number two economy may stagnate over the course of the year.
However, Malaysia reported that the economy grew 5.8 percent in the second quarter, expanding at a faster clip than expected, thanks to domestic demand and robust exports.
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For RUSSIAN market report, see) Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg
Morgan Stanley Emrg Mkt Indx 1056.90 -6.43 -0.60 +22.57
Czech Rep 1029.91 -7.61 -0.73 +11.75
Poland 2346.49 -6.69 -0.28 +20.46
Hungary 37078.35 -108.94 -0.29 +15.86
Romania 8317.79 -14.57 -0.17 +17.40
Greece 827.70 -4.36 -0.52 +28.60
Russia 1022.87 -11.18 -1.08 -11.23
South Africa 49013.24 -52.57 -0.11 +11.64
Turkey 06285.73 -539.60 -0.51 +36.02
China 3269.24 +0.81 +0.02 +5.34
India 31468.62 -326.84 -1.03 +18.19
Currencies Latest Prev Local Local
close currency currency
% change % change
Czech Rep 26.09 26.06 -0.11 +3.51
Poland 4.28 4.27 -0.21 +2.85
Hungary 303.78 303.76 -0.01 +1.66
Romania 4.59 4.58 -0.07 -1.11
Serbia 119.17 119.20 +0.03 +3.51
Russia 59.37 59.21 -0.27 +3.19
Kazakhstan 333.01 332.56 -0.14 +0.19
Ukraine 25.49 25.51 +0.08 +5.92
South Africa 13.24 13.25 +0.07 +3.68
Kenya 103.10 103.35 +0.24 -0.71
Israel 3.62 3.62 +0.06 +6.37
Turkey 3.53 3.52 -0.18 -0.11
China 6.67 6.67 -0.03 +4.02
India 64.12 64.17 +0.07 +5.96
Brazil 3.17 3.17 -0.02 +2.47
Mexico 17.86 17.84 -0.13 +15.97
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 328 1 .00 7 94.99 1
All data taken from Reuters at 08:58 GMT. Currency percent change calculated from the daily U.S. close at 2130 GMT.
Reporting by Karin Strohecker with additional reporting by Claire Milhench; editing by Mark Heinrich