Left Menu
Development News Edition

Emerging economies rose with positive global cue; lira, rand, rouble soar

Emerging economies rose with positive global cue; lira, rand, rouble soar
China's commerce ministry said it would hold vice-ministerial talks with the United States on Jan. 7-8 as they look to end the trade war that has been hurting both economies and markets across the globe. (Image Credit: Twitter)

Emerging market stocks rose on Friday in a cautious return of risk appetite, with China shares taking the lead, as Beijing announced a new round of trade talks with the United States. China's commerce ministry said it would hold vice-ministerial talks with the United States on Jan. 7-8 as they look to end the trade war that has been hurting both economies and markets across the globe.

The MSCI index of emerging market shares rose 0.7 per cent to their highest in a week, with mainland China and Hong Kong shares closing more than 2 per cent higher each. While noting the optimism from the upcoming talks, analysts, however, remain cautious of a definitive outcome from the meeting.

"While this will be the first face-to-face talks since the 90-day trade truce, suggesting that the trade negotiation is still on the track, a vice-minister level talk also indicates that a breakthrough is unlikely to be made for the time being," Commerzbank analysts said in a note.

Besides trade talk hopes, China stocks were boosted by the government's move to cut banks' reserve requirement ratios as it sought to support the economy, and as data showed the country's December services sector extended its solid expansion.

Most other developing market bourses across Asia were also in the black. Turkey stocks rose over 1 per cent in one course for their best session in two weeks, while South Africa shares climbed 0.7 per cent. The broader emerging market index, however, is on track for a loss over the week – the first time it started the year in the red since 2016, owing to hefty losses earlier in the week. The tepid dollar and fast fading prospects of higher interest rates from the U.S. Federal Reserve lent support to developing market currencies, helping the index hit a one month high with most Asian currencies firming.

But, the gains on emerging markets currencies may be limited whichever way the Fed were to move, Morten Lund, an analyst with Nordea Markets suggested. "Either the Fed can continue hiking rates ... that would be bad for EM. Or, if they were to actually stop, which you can say the market has priced in now, it would probably mean we would see a slowdown in the real economy, that would also not be good for EMFX."

On the day, the Turkish lira climbed nearly 1 per cent, recovering from its steep dive the last session when lower-than-expected inflation data had investors betting on chances that the central bank could make a premature rate cut. Commodity-rich South Africa's rand firmed more than 1 per cent, with a slower rate of decline in December's private sector activity which fanned economic recovery hopes, adding to its cheer. The Russian rouble touched a near two-week high as it found support from higher oil prices.

Among emerging European economies, Polish stocks led gains in the region with its 0.8 per cent climb, while the zloty weakened as December inflation dipped further below the central bank's target range ahead of next week's interest rate meeting.

(With inputs from agencies.)

Download The Devdiscourse News App for Latest News.



Conspiracy theories on COVID 19: Legislators, Scientists, and Journalists all joined the Caravan

Conspiracy theories are not new for virus epidemics. There have been conspiracy theories on HIV-AIDS, Polio Vaccines, Ebola Virus, and several other diseases as well. However, what makes the 2019 Novel Coronavirus different from others is ...

Top 10 Fake News, Myths and Realities on 2019 Novel Coronavirus COVID 19

With nearly 1500 deaths by January 14 and around 65,000 infections in China, the Novel Coronavirus 2019 has become one of the worst health epidemics of the 21st Century. However, 8,573 people have been cured but the rumor mongers are a...

Handling fake news Infodemic in time of Coronavirus epidemic

Social media has provided a platform where everybody can disseminate his her views without any supervision. Its excellent if the message is genuine but misinformation is equally disastrous. Health is such a topic where every Tom and Harry c...

Sentiment Analysis on Budget 2020: Long shot for solution to economic worries?

Industries and individuals alike had high expectations from the government to take tangible steps but the budget 2020 seems to have failed expectations....


Latest News

Will send medical team to Tirupur if needed, says Kerala CM on truck-bus collision

Kerala Chief Minister Pinarayi Vijayan on Thursday said that if the need arises, his government will send a medical team to Tamil Nadus Tirupur where 19 people were killed in a truck-bus collision this morning. All necessary arrangements ha...

Sharon Choi's potential feature film not based on awards season

Budding filmmaker Sharon Choi, the star interpreter for South Korean director Bong Joon Ho and his Parasite team, says contrary to media reports, her directorial debut will not follow the awards season. Like the film, Choi too became the ce...

Self-reliance in small arms manufacturing fundamentally necessary for India: CISC R Hari Kumar

India needs to be self-reliant in manufacturing small arms, even as the armed forces urgent requirements are being currently met through imports, Vice Admiral R Hari Kumar, Chief of Integrated Defence Staff to the Chairman Chief of Staffs C...

Egyptair to resume flights to China from next week - statement

Egyptair said in a statement on Thursday that it will resume some flights to and from China starting next week.The national airline suspended all flights to China in early February over the coronavirus outbreak. Egyptair has decided to resu...

Give Feedback