EMERGING MARKETS-Stocks set to snap six-day losing streak on China growth optimism

The Russian rouble steadied against the dollar after one of its most volatile sessions this year, with markets now watching out for how Moscow will respond to an aborted mutiny by heavily-armed mercenaries over the weekend. Turkey's lira weakened to a record low of 26.1722, after an official and bankers said the central bank had stopped using its reserves to support the currency.

Emerging market stocks looked set to snap a six-day losing streak on Tuesday, after China reassured investors of its growth prospects in the second quarter, while Russia's rouble steadied following a volatile session due to geopolitical tensions.

The MSCI's index for emerging market stocks rose 0.5% by 0853 GMT, with equity indexes in China and Hong Kong leading the advance as they gained between 1% and 2%. China's Premier Li Qiang said the country's economic growth in the second quarter will be higher than the first and is expected to reach the annual growth target of around 5%, easing worries around Beijing's uneven post-COVID-19 recovery.

"While 5% considered achievable for the year has helped solidify sentiment, investors will be watching closely for evidence of concrete action and will want to see measures brought forward soon," said Susannah Streeter, head of money and markets at Hargreaves Lansdown. The Russian rouble steadied against the dollar after one of its most volatile sessions this year, with markets now watching out for how Moscow will respond to an aborted mutiny by heavily-armed mercenaries over the weekend.

Turkey's lira weakened to a record low of 26.1722, after an official and bankers said the central bank had stopped using its reserves to support the currency. "Policymakers are claiming that banks are no longer supporting the currency with their own balance sheets – a claim which is difficult to verify," said Tatha Ghose, FX analyst at Commerzbank.

"The CBT exhausted its FX reserves trying stabilise the lira while interest rates were being cut, with net reserves recording negative for some time now." South Africa's rand was among gainers on the day, rising about 0.8% helped by a softer dollar, while stocks in the region added 0.3% amid higher gold prices.

Central and eastern European currencies were mixed against a strengthening euro. European Central Bank President Christine Lagarde said the central bank is unlikely to call a peak in interest rates in the near future. Kenya's shilling held steady against the dollar, a day after policymakers raised lending rates sharply in a surprise meeting.

Pakistan's sovereign dollar-denominated bonds extended their rally, with shorter-dated maturities leading the advance, on hopes the country could receive more financing from the International Monetary Fund in the days to come. Investors awaited minutes from Brazil's central bank last policy meeting later in the day, along with a June inflation reading.

Hopes of interest rate cuts in Latin America have grown amid signs of cooling inflation in Brazil and Chile. For GRAPHIC on emerging market FX performance in 2023, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2023, see https://tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets For CENTRAL EUROPE market report, see

For TURKISH market report, see For RUSSIAN market report, see

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