Emerging market stocks dipped on Wednesday as fresh doubts over progress in US-China trade talks and global growth concerns weighed, while developing world currencies held firmed against a resurgent dollar.
A report associated with a preliminary US-China trade meeting being cancelled, though later denied by Washington , put a lid on risk sentiment towards developing world.
“We’ve been sceptical about any concrete deals being created in the short-term,” said Morten Lund, an analyst with Nordea Markets.
“Let’s examine if Trump changes his mind,” he added, noting pressure on US markets will give fresh impetus to talks.
MSCI’s index of emerging market stocks declined 0.2%, increasing Tuesday’s 0.8% fall.
Stocks in Taiwan, which may have a major weighting over the benchmark lost half a percent, while those invoved with fellow heavyweights China and?South?Korea averted heavy losses on hopes China will improve stimulus measures to aid its economy.
In the area market, China’s yuan firmed to wipe away all losses incurred since Friday.
Turkey’s lira firmed 0.3%, weathering data showing consumer confidence fell to 58.2 points in January from 58.7 points every thirty days earlier.
Finance Minister Berat Albayrak said he expects the issue while using Country involving state-backed Halkbank in the Iran sanctions-busting case to get resolved soon.
However, some market participants found Albayrak’s assertion that Ankara currently sees no recession or negative growth tough to believe.
“We do believe Turkey is going to be hit with recession, , nor share that view. It’s a lttle bit surprising their stance given from the sources we understand policymakers have reached consensus over the country entering into recession,” said Nordea’s Lund.
Turkish stocks rose 0.4%, while Halkbank’s shares gained 1.1%.
Russia’s rouble strengthened 0.2%, while firm prices of oil aided the country’s energy stocks as they quite simply drove the area equity index 0.3% higher.
South?Africa‘s rand firmed 0.6%, recouping most of the Tuesday’s 1.1% loss.
Data showed headline consumer inflation slowed to 4.5% year on year in December from 5.2% in the earlier month, consistent with expectations of a Reuters poll.
In emerging Europe, Romania’s leu firmed 0.3% with the euro, to recover some of Tuesday’s losses, which watched it trade in an all-time low, down 1.4%.
Analysts at Societe Generale wrote in a be aware that while Romania’s currency reserves appear sufficient to take care of foreign exchange pressures, policy inaction such as not using reserves, changing fiscal policy, or introducing other stabilisation policies keeps the leu under pressure as sentiment is fragile.
The surplus yield investors receive by holding Romanian local 10-year bonds when compared with German local 10-year bonds hit its highest in many more than six years in the session – at over 498 basis points.
