EMERGING MARKETS-Emerging markets up ahead of US CPI, Fitch cuts China's ratings outlook

Most emerging market stocks and currencies rose on Wednesday ahead of a key U.S. inflation report, while ratings agency Fitch cut its outlook on China, which weighed on domestic shares along with weakness in real estate stocks. The MSCI index for emerging market stocks rose 0.6%, while currencies inched up 0.1% by 0842 GMT, with all eyes on U.S. consumer price data due later in the day for cues on the Federal Reserve's monetary policy path.

Most emerging market stocks and currencies rose on Wednesday ahead of a key U.S. inflation report, while ratings agency Fitch cut its outlook on China, which weighed on domestic shares along with weakness in real estate stocks.

The MSCI index for emerging market stocks rose 0.6%, while currencies inched up 0.1% by 0842 GMT, with all eyes on U.S. consumer price data due later in the day for cues on the Federal Reserve's monetary policy path. Trading volumes were thin with markets in Singapore, Kuala Lumpur, Manila and Jakarta closed for the Eid al-Fitr public holiday, while South Korean markets were closed due to legislative elections to elect a 300-member parliament.

China's Shanghai Composite index and blue-chip CSI 300 index closed 0.7% and 0.8% lower, respectively, bucking the trend as shares of property developers weighed. Also hurting sentiment, Fitch revised its outlook on China to negative, citing risks to public finances as the economy faces increasing uncertainty in its shift to new growth models.

The Hang Seng Index climbed 1.9%, with Hong Kong shares of Alibaba rising 4.9% after co-founder Jack Ma penned a lengthy memo to employees that expressed support for the internet giant's restructuring efforts. Among currencies, the Czech crown rose 0.3% against the euro after data showed inflation stuck at the central bank's target of 2% in March for a second straight month after easing sharply earlier this year.

The Thai baht was little changed against the dollar after the central bank left its key interest rate unchanged, as expected, defying government pressure to lower borrowing costs to help revive economy. "The fact that members remained on the sidelines today probably reflects partly an anxiety about further rocking the baht, which is Asia's second-worst performing currency so far in 2024, after the Japanese yen," said Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics.

"We've been expecting the BoT (Bank of Thailand) to keep rates higher than necessary for a bit longer, just to demonstrate its independence as an institution amid the government's explicit pleas for cuts as soon as possible." South Africa's rand shed 0.5% against the dollar, while Russia's rouble weakened to a more than two week low against the greenback.

Asia's most valuable publicly listed company TSMC slipped 0.5% even as the chipmaker reported a 16.5% rise in first-quarter revenue, beating market expectations. Taipei stocks inched 0.2% lower, retreating from their record highs last session.

Poland's energy stocks dropped nearly 5% after the government decided to drop plans to separate coal-fired power plants into a special company. Vietnam sold 7.03 trillion dong ($281 million) of government bonds in an auction at the Hanoi Stock Exchange, the bourse said, slightly down from $284 million raised last week.

HIGHLIGHTS: ** Thailand sees flagship $13.8 billion handout scheme spurring 5% growth next year

** Philippines president says summit with U.S., Japan to include South China Sea cooperation ** Polish government drops coal merger idea

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