EMERGING MARKETS-Battered stocks inch up; S. African rand falls on power cuts, growth fears

PUBLISHED: Mon, 16 May 2022 12:06:02 GMT
  • China stocks slip 0.3%-0.8% on weak data
  • Rand down 0.4% amid growth concerns, power cuts, gold price decline
  • Turkish March current account deficit $5.554 billion; lira slips 0.5%

By Anisha Sircar and Bansari Mayur Kamdar

May 16 (Reuters) – Emerging market stocks and currencies hovered just above their lowest level in almost two years on Monday as dire Chinese economic data renewed concerns around global growth, while the South African rand came under pressure from domestic power cuts.

The MSCI index for emerging market (EM) equities .MSCIEF inched 0.2% higher, still down 6.5% on the month and nearly 20% on the year, while currencies .MIEM00000CUS were little changed against a strong greenback after a sixth straight weekly decline last week.

The dollar index =USD was perched at a two-decade peak as investors ramped up U.S. monetary policy tightening expectations. FRX/

“The main factor weighing on risky emerging assets is the prospect of further rate hikes by the Fed, accompanied by growing concerns that the global economy could be heading for recession,” said Piotr Matys, senior FX analyst at In Touch Capital Markets.

Concerns around monetary tightening amid slowing global growth, rising inflation and a cooling commodity price rally have hampered the attractiveness of emerging markets.

China stocks .SSEC, .CSI300 fell between 0.3% and 0.8% as data showed the country’s April retail sales shrank 11.1% on the year, almost twice the drop forecast, while industrial output fell 2.9%. Read full story

South Africa’s rand ZAR= fell 0.4% as domestic power cuts, weaker gold prices and a blurry growth outlook weighed on the currency. Read full story

Investor focus was on a monetary policy decision expected on Thursday where the central bank is likely to make its first 50 basis point repo rate hike in more than six years. Read full story

The Czech crown EURCZK= inched 0.3% higher after hitting two-month lows last week. Data showed industrial producer prices rose 26.6% year-on-year in April, greater than market expectations. Read full story

The Czech National Bank launched a “true monetary-policy intervention” when it entered the market on May 12 to stop a weakening of the crown, board member Tomas Holub said Friday. Read full story

The Sri Lankan rupee LKR= fell 1.2% ahead of an address by the crisis-hit country’s new prime minister, Ranil Wickremesinghe. Read full story

Turkey’s lira TRY= fell 0.5% as the central bank said the country’s current account deficit in March widened to $5.554 billion, more than the forecasted $5.371 billion, but is up about 18% from its record low hit in December. Read full story

“The government notion that Turkey will be able to bring inflation lower in coming quarters if the current account deficit narrows is being put to a major test,” Matys said.

For GRAPHIC on emerging market FX performance in 2022, see http://tmsnrt.rs/2egbfVh

For GRAPHIC on MSCI emerging index performance in 2022, see https://tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets Read full story

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB

(Reporting by Anisha Sircar and Bansari Mayur Kamdar in Bengaluru; Editing by Kirsten Donovan)

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