Stock market report. 3d illustration

March 27 (Reuters) – Emerging market stocks and currencies dipped on Monday in a dull start to the final week of the first quarter as fears about a global banking crunch persisted, with South Africa’s rand down ahead of a central bank decision later this week.

EM stocks carried declines over from Friday when Germany’s biggest lender Deutsche Bank DBKGn.DE shares plunged alongside a sharp jump in the cost of insuring its bonds against the risk of default.

The MSCI’s index for EM equities .MSCIEF fell 0.9%, down for the second straight day and on track for a small 1% gain in the first quarter.

The broader upbeat picture for developing economy assets that saw them come into favour in the final months of last year and the start of 2023 has fizzled out amid concerns over growth and interest rates and the banking sector.

“At this stage, the only predictive certainty is a further tightening of lending conditions, and not just in the U.S.,” said Vincent Chaigneau, head of research at Generali Investments.

Shares in China .SSEC and Hong Kong .HSI fell after data showed the slump in Chinese industrial firms’ profits deepened in the first two months of 2023, and amid geopolitical tensions.

Russian President Vladimir Putin said on Saturday the country would station tactical nuclear weapons in Belarus.


“Over the weekend we learnt that Putin plans to deploy tactical nuclear weapons in Belarus, despite Xi Jinping earlier making it ‘very clear’ to Putin that he should not,” Chaigneau said.

The rouble RUBUTSTN=MCX strengthened, while most other EM currencies weakened against the safe-haven dollar, helped by rising oil prices and this week’s month-end tax payment, which usually sees exporters convert foreign exchange revenue to pay local liabilities.

South Africa’s rand ZAR= fell 0.7%. The South African Reserve Bank (SARB) will announce its rate decision on Thursday, with markets expecting a 25-basis-point hike.

Other EM central banks are also scheduled to decide on lending rates this week, with Colombia’s central bank seen raising the interest rate to 13%, while The National Bank of Hungary (NBH) is widely expected to keep its base rate steady at 13% on Tuesday.

The Bank of Thailand is set to implement its fifth consecutive 25-basis-point interest rate hike on Wednesday.

Brazil’s President Luiz Inacio Lula da Silva cancelled a trip to China due to medical reasons, and the March 27-31 visit will be rescheduled for a later date.


Focus will now fall on an eagerly awaited fiscal framework in Brazil, which was initially promised by Finance Minister Fernando Haddad for March, but was postponed by Lula until after the planned China trip.

For GRAPHIC on emerging market FX performance in 2023, see

For GRAPHIC on MSCI emerging index performance in 2023, see

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 Shreyashi Sanyal in Bengaluru; editing by Jason Neely)