January 5, 2018 / 10:16 AM / 6 months ago

EMERGING MARKETS-Emerging stocks roar into 2018 with best weekly gains since July

LONDON, Jan 5 (Reuters) - Emerging stocks and currencies had a strong start to the year fuelled by solid growth numbers, perky commodity markets and a tepid dollar with equities on track for the best weekly performance since July.

MSCI's emerging market index rose 0.4 percent to take weekly gains to 3.4 percent - the best start to a new year since 2006. Asia ex-Japan shares hit a fresh decade high, hovering close to an all-time record led by gains in South Korea.

Risk appetite has been whetted by a run of solid data from both developing and emerging economies, confirming the economic expansion is firmly on track.

Thursday's latest U.S. ADP National Employment Report further boosted the mood, showing private employers added a forecast-beating 250,000 jobs in December, and stoking expectations for key U.S. non-farm payroll data out later on Friday.

The upbeat outlook and a tepid dollar also fuelled commodity markets with the Thomson Reuters Core Commodity CRB index at its highest since October 2015 and oil prices holding near the highest levels since May 2015.

"That's providing a macro tailwind for emerging markets – oil and global trade both speak to stronger emerging markets exports and emerging markets growth, which helps lift people’s expectations on a whole range of EM assets," said Koon Chow, strategist at UBP.

Currencies were trading more mixed on the day but painted an equally upbeat picture for the first trading week of the year.

Turkey's lira and Russia's rouble are on track to end the week around 1 percent stronger against the dollar.

South Africa's rand eyed an eighth straight week of gains - the longest weekly winning streak since late 2002.

However, analysts thought the cheer may not last, with the latest Reuters poll showing expectations for the rand to weaken by more than 12 percent by end-2018 as the country's fiscal woes return.

Inspired by the benign backdrop, governments continued to tap international capital markets. Overnight, Argentina sold $9 billion in a three-part dollar bond, raising nearly a third of its expected financing needs for 2018 in a deal that was 2.4 times oversubscribed.

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

on year

Morgan Stanley Emrg Mkt Indx 1197.51 +4.95 +0.42 +3.37

Czech Rep 1105.03 -0.10 -0.01 +2.49

Poland 2525.55 -7.62 -0.30 +2.61

Hungary 39822.23 -27.77 -0.07 +1.13

Romania 7993.37 +27.67 +0.35 +3.09

Greece 828.68 +2.90 +0.35 +3.28

Russia 1211.74 -2.43 -0.20 +4.96

South Africa 52753.17 +90.54 +0.17 +0.42

Turkey 16590.74 +1099.55 +0.95 +1.09

China 3392.36 +6.65 +0.20 +2.58

India 34162.77 +193.13 +0.57 +0.31

Currencies Latest Prev Local Local

close currency currency

% change % change

in 2018

Czech Rep 25.51 25.52 +0.02 +0.05

Poland 4.15 4.15 -0.09 +0.56

Hungary 308.14 308.06 -0.03 +0.78

Romania 4.63 4.63 -0.07 +0.95

Serbia 118.90 118.93 +0.03 -0.42

Russia 57.06 56.94 -0.21 +1.05

Kazakhstan 329.80 332.02 +0.67 +0.91

Ukraine 28.19 28.01 -0.64 -0.16

South Africa 12.35 12.31 -0.33 +0.09

Kenya 103.15 103.30 +0.15 -0.05

Israel 3.45 3.44 -0.03 +0.93

Turkey 3.74 3.75 +0.08 +1.26

China 6.49 6.49 +0.07 +0.30

India 63.42 63.40 -0.03 +0.65

Brazil 3.23 3.23 +0.00 +2.40

Mexico 19.30 19.29 -0.08 +1.78

Debt Index Strip Spd Chg %Rtn Index

Sov'gn Debt EMBIG 301 -1 .11 8 10.79 1

All data taken from Reuters at 10:03 GMT. Currency percent change calculated from the daily U.S. close at 2130 GMT.

Additional reporting and graphic by Claire Milhench; Editing by Richard Balmforth

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