EMERGING MARKETS-Stocks fall on global growth concerns, rand slips

South Africa's rand eased on Thursday ahead of the central bank's monetary policy meeting, where it is expected to make a 50 basis point hike, while emerging market stocks slid tracking a sharp sell-off on Wall Street overnight on growth worries.


Reuters | Updated: 19-05-2022 14:28 IST | Created: 19-05-2022 14:27 IST
EMERGING MARKETS-Stocks fall on global growth concerns, rand slips
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South Africa's rand eased on Thursday ahead of the central bank's monetary policy meeting, where it is expected to make a 50 basis point hike while emerging market stocks slid tracking a sharp sell-off on Wall Street overnight on growth worries. The MSCI index for emerging market (EM) equities fell 2.1% and was set to break its four-day rally, while currencies inched 0.3% lower.

The rand slipped 0.2% ahead of the South African Reserve Bank's rate decision due at 1300 GMT. The central bank is set to make its first 50 bp hike in more than six years, taking it to 4.75%, to prevent potential second-round effects from higher consumer prices, a Reuters poll forecast on Friday.

"Given the challenges both in terms of the growth outlook but also in terms of public finances, they may go for a smaller hike this time around," said Per Hammarlund, a chief emerging-market strategist at SEB. "The rand could come under a bit of pressure, not least because of concerns about South Africa's public finances. They need to do more to consolidate the budgets and the debt level."

China's yuan eased 0.2% against the dollar, as market sentiment soured after major global investment banks including Goldman Sachs cut their expectations for China's economic growth. Among stocks, tech firms led losses on Hong Kong's benchmark index after a steep selloff on Wall Street on Wednesday and disappointing results by index heavyweight Tencent.

However, China's blue-chip CSI300 index and the Shanghai Composite index rose 0.2% and 0.4%, respectively, reversing early losses, as Shanghai set out its latest plan for exiting coronavirus lockdowns. Sri Lankan shares fell 2.9% after the central bank held its key interest rates steady, following a massive 700 bp hike at its previous meeting.

The Philippine peso edged up 0.1% as the central bank raised interest rates for the first time since 2018 to stem intensifying inflationary pressures that could derail the domestic economy's recovery. Russia's rouble firmed past 63 against the dollar, returning to levels not seen since January 2020, propped up by capital controls as well as looming tax payments that usually require extra conversion of foreign currency to meet local liabilities.

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

For CENTRAL EUROPE market report, see For TURKISH market report, see

For the RUSSIAN market report, see

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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