LONDON, Aug 25 (Reuters) - Emerging market stocks rose to multi-year highs on Friday and were set to end the week up 2.5 percent, led by gains in Poland and China, ahead of a central bankers’ meeting that is not expected to rock the boat.
MSCI’s benchmark emerging markets index was up 0.36 percent in morning trade to its highest since September 2014, with gains across the board in Asia and emerging Europe.
Amongst the outperformers was Poland, up 4.7 percent for the week, its biggest weekly gain since late April, and trading at more than two-year highs.
Polish shares had leapt 2.7 percent on Thursday in their biggest daily gain since March, supported by solid energy company results, whilst signs of a tight labour market have helped the zloty firm against the euro.
Chinese mainland shares jumped between 1.6 and 1.8 percent, with the blue chip index at its highest since December 2015 and the Shanghai Composite at its highest since January 2016.
The latter delivered its best daily performance in a year, powering past a key resistance level after a flurry of stronger than expected earnings reports from major Chinese companies.
Hong Kong shares also gained 1.2 percent to end the week up nearly 3 percent, whilst Hungary shares hit record highs, up 0.2 percent, and Turkish stocks rose 0.7 percent.
Jakob Christensen, head of emerging markets research at Danske Bank, said the market was supported by a combination of good global growth and expectations that the U.S. Federal Reserve and European Central Bank won’t signal any big policy shifts at the Jackson Hole symposium today.
“The strong indicators out of Europe and the U.S. suggest the recovery is alive and kicking, yet inflation pressures remain muted, meaning major central bank leaders won’t suggest any hawkish change,” Christensen said.
“This means flows to emerging markets will be ongoing – the Fed and ECB are not in an abrupt tightening phase and there is still good demand for emerging market products.”
Some emerging currencies also enjoyed a solid week, with the South Korean won up 1 percent as tensions on the Korean peninsula eased, whilst the Brazilian real has rallied around 1.5 percent against the dollar on signs of reform progress.
The South African rand strengthened 0.4 percent and the Mexican peso firmed 0.2 percent, continuing its recovery from a mid-week wobble.
In emerging Europe, the Hungarian forint was steady ahead of a debt ratings review by S&P Global that is not expected to result in any changes.
Peter Virovacz, a senior economist at ING, said a shift in the outlook from neutral to positive was an outside possibility, noting strong economic momentum.
“Hungary has started to succeed in reducing the cost of debt financing, which could also be seen as a positive by S&P. However, we believe that the rating agency is likely to wait and see whether further progress can be made,” Virovacz said in a note to clients.
Angola’s sovereign dollar bonds were steady as provisional general election results showed the ruling MPLA party had a commanding lead, with the former defence minister Joao Lourenco expected to be voted in as Angola’s first new president for 38 years.
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
on year Morgan Stanley Emrg Mkt Indx 1086.20 +3.75 +0.35 +25.97 Czech Rep 1036.27 +2.12 +0.20 +12.44 Poland 2464.38 +8.11 +0.33 +26.51 Hungary 38032.14 +77.73 +0.20 +18.84 Romania 8356.24 +7.48 +0.09 +17.94 Greece 832.39 -3.16 -0.38 +29.33 Russia 1055.09 +5.13 +0.49 -8.44 South Africa 50315.00 +213.52 +0.43 +14.61 Turkey 09830.72 +676.80 +0.62 +40.56 China 3331.66 +60.15 +1.84 +7.35 India 31596.06 +28.05 +0.09 +18.66
Currencies Latest Prev Local Local
close currency currency
% change % change
in 2017 Czech Rep 26.09 26.10 +0.03 +3.51 Poland 4.26 4.26 +0.09 +3.47 Hungary 304.16 303.99 -0.06 +1.53 Romania 4.59 4.58 -0.09 -1.09 Serbia 119.13 119.18 +0.04 +3.54 Russia 59.09 59.12 +0.05 +3.67 Kazakhstan 332.96 330.94 -0.61 +0.21 Ukraine 25.53 25.53 +0.00 +5.76 South Africa 13.16 13.20 +0.29 +4.37 Kenya 103.20 103.10 -0.10 -0.80 Israel 3.60 3.59 -0.09 +7.09 Turkey 3.48 3.48 +0.02 +1.27 China 6.66 6.66 -0.04 +4.21 India 64.03 64.04 +0.02 +6.11 Brazil 3.15 3.15 -0.01 +3.36 Mexico 17.68 17.72 +0.22 +17.14
Debt Index Strip Spd Chg %Rtn Index Sov’gn Debt EMBIG 321 -1 .02 7 99.04 1
Reporting by Claire Milhench; Editing by David Holmes