Emerging Markets – Lira braces for sixth weekly decline; Dividends boost Hong Kong shares
* Hong Kong stocks rose on hopes about Sino-US relations, technology boost
* Hungarian forint, stocks prepare for weekly decline
By Bansari Mayur Kamdar
(Reuters) – The Turkish lira was poised for its sixth consecutive weekly loss on Friday, while Hong Kong stocks rose on investors’ relief at signs of improving Sino-US relations and on expectations that Beijing would implement more measures to revive growth.
Technology shares led Hong Kong’s Hang Seng Index higher after better-than-expected earnings from Alibaba Group and Baidu.
China’s CSI300 index rose 0.2% after the US Secretary of State said Washington would not prevent Beijing from developing its economy, but wanted it to abide by international rules.
Emerging market stocks rose 1.8%, while currencies rose 0.4%, but are still on track for their fifth consecutive monthly decline.
“Risk appetite has improved. We’ve come from several weeks of completely bad sentiment which is a good sign that things seem to be reversing a bit,” said Christian Maggio, head of emerging markets strategy at TD Securities.
The Turkish lira fell and is heading for its sixth consecutive weekly loss after the central bank decided to keep key interest rates at 14% amid stubborn inflation.
“The lira has been in a sharp decline for some time now. They announced the interest rate yesterday and did nothing even though inflation was at 70%,” Maggio added.
“The country, from an overall financial point of view, is very unbalanced at the moment and the lira reflects that.”
In central Europe, the Hungarian forint rose 0.1%, but was set to end the week lower.
Hungary’s Budapest SE Index extended losses and is on track for its worst weekly performance in nearly three months as investors await details of surprising new taxes on banks and large private companies.
South Africa’s rand settled down 0.2% as the US dollar fell to a one-month low amid signs that the Federal Reserve may slow or even halt its monetary tightening in the second half of the year.
The Russian ruble extended losses against the dollar after dropping nearly 10% in the previous session, as the central bank cut interest rates and hinted that more cuts would follow, while the prospect of easing capital controls and a possible sovereign debt default hurt the currency.
For a GRAPHIC on the performance of emerging market FX in 2022, see http://tmsnrt.rs/2egbfVh For a GRAPHIC on the performance of the MSCI Emerging Index in 2022, see https://tmsnrt.rs/2OusNdX
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For the Russian market report see (Bengaluru Bansari Mayor Kamdar Report; Editing by Sherry Jacob Phillips)