EMERGING MARKETS-China stocks lead EM rebound; cenbank moves eyed

Emerging market stocks inched higher on Thursday, led by China after signs of support from Beijing boosted tech heavyweights, while investors focused on a series of central bank decisions in Turkey, Mexico, Egypt, Philippines and Indonesia. MSCI's index of emerging market shares ticked up 0.1%, led by Chinese and Hong Kong's key indexes after President Xi Jinping signalled support to the country's payment and fintech firms.

Emerging market stocks inched higher on Thursday, led by China after signs of support from Beijing boosted tech heavyweights, while investors focused on a series of central bank decisions in Turkey, Mexico, Egypt, Philippines, and Indonesia.

MSCI's index of emerging market shares ticked up 0.1%, led by Chinese and Hong Kong's key indexes after President Xi Jinping signaled support for the country's payment and fintech firms. The regional currencies index slipped 0.2%, while the safe-haven greenback eased but remained strong, having gained ground in recent weeks as investors worry that aggressive rate hikes by central banks could cause a sharp global slowdown or recession. These worries have also sparked a flight out of riskier EM assets.

"The markets continue to price in more rate hikes in developed markets, and the question is how EM policy-makers will respond to this changing environment, especially if there are major shifts on the political front," said Natalia Gurushina, EM economist at VanEck. Turkey's lira firmed 0.5% against a steadying euro, recouping all of Wednesday's losses. The country's central bank is expected to hold its policy rate unchanged at 14% for a sixth meeting, a Reuters poll showed, in the face of rampant inflation at 73.5% that shows no signs of slowing down.

Elsewhere, the Philippine peso dipped 0.6% amid a broader risk-off. The country's central bank raised its benchmark interest rate by 25 basis points for a second consecutive policy meeting, as expected. The Indonesian rupiah rose 0.2% ahead of a policy decision due later in the day when it is likely to hold rates steady.

"It looks like there will be no surprises in Indonesia, but it's going to be an interesting day in Mexico – bi-weekly inflation in the morning will be followed by the central bank's rate-setting meeting," said Gurushina. Mexico's central bank is expected to hike its key interest rate by a record 75 basis points to reach 7.75%, while the Central Bank of Egypt will also hold its monetary policy committee meeting on Thursday.

South Africa's rand, considered a proxy currency for the developing world, fell 0.6% against the dollar. In a week dotted with central bank moves, EM shares were set to close more than 1% lower.

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