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Optimism led by Chinese data take emerging markets higher


Devdiscourse News Desk
Updated: 17-04-2019 14:43 IST
Optimism led by Chinese data take emerging markets higher

MSCI's index of emerging market shares climbed 0.3 per cent to hover near ten months highs, while its currency index rose 0.2 per cent.

Emerging market shares and currencies firmed on Monday after China's economic growth for the first quarter rose unexpectedly, but gains were limited as doubts remain if it may still be too early to call it a recovery.

MSCI's index of emerging market shares climbed 0.3 per cent to hover near ten months highs, while its currency index rose 0.2 per cent, with China's yuan rising to four-week highs. China's economy grew at a steady 6.4 per cent pace in the first quarter, data showed, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement.

This follows a slew of positive China data since late last week and though many had expected a recovery only in the second half of 2019, analysts and traders warn of the sustainability of the turnaround. "On one hand, positive that Q1 stimulus measures have apparently worked to reverse the Chinese economy but on the other hand, it could lead to dampened hopes of any additional stimulus and a lack of longer-term follow through," said a trader in London.

The Shanghai Composite index closed up 0.3 per cent, while gains in Chinese blue chips were muted. Shares in Hong Kong, South Korea and South Africa slipped. But, most other bourses in the developing world rose with Turkey's up more than 0.8 per cent and Russia's climbing 0.2 per cent higher.

Currencies of emerging markets also gained against a weaker dollar. Commodity giant South Africa's rand firmed half a per cent, while Turkey's lira climbed 0.4 per cent with bettering ties with the United States adding to the cheer. Turkey's defence minister said he had "very constructive" talks with U.S. Acting Defense Secretary Patrick Shanahan, state-owned Anadolu news agency reported on Wednesday.

President Tayyip Erdogan's spokesman Ibrahim Kalin said on Tuesday Turkey expects President Donald Trump to use a waiver to protect it if the U.S. Congress decides to sanction Ankara over a planned S-400 purchase.

(With inputs from agencies.)


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