Russia’s rouble hovered near one-month high against the dollar on Thursday ahead of a central bank decision where the Bank of Russia is expected to keep borrowing costs unchanged, while emerging market bourses tracked the rally in global stocks.
The MSCI index for emerging market stocks climbed 1.0% by 0841 GMT, and was on track for its best weekly gains since July 2023. Heavyweight Hong Kong shares closed 2.1% higher, posting their best weekly performance in 18 months, while China stocks also bounced after strategists from global investment houses upgraded their views on Chinese shares.
Foreign investors poured money into the Chinese A-share market with the daily purchase amount via the stock connect programme hitting a record high. Tech-heavy indexes in South Korea and Taiwan gained more than 1% each supported by Alphabet and Microsoft’s strong earnings overnight on Wall Street.
“Last week’s sell-off left global tech trading at just 22.5 times 2025 forecast earnings, down from close to 25 times earlier this year,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, adding that the pullback in tech has left valuations looking less demanding and offers an attractive entry point. Nevertheless, in the week to Wednesday, emerging market equities saw outflows for their third week and outflows also resumed in emerging market debt, according to data from BofA Global Research.
Meanwhile, global ratings agency Fitch said South Korea’s public finances are no longer a strength for its sovereign credit rating but are now a neutral factor requiring near-term efforts to contain the rise in debt. Emerging market currencies index was flat and on track for marginal gains as the dollar retreated.
The rouble was steady against the dollar ahead of its rate setting meeting where the central banks is expected to hold rates at 16% with the gradual slowdown in inflation preventing it from easing borrowing costs more quickly. South Africa’s rand gained 0.3% against the dollar, while the Turkish lira weakened slightly.
Turkey will take steps in fiscal policy in the coming period to support disinflation, Finance Minister Mehmet Simsek said, adding that disinflation will begin in the second half of the year. Currencies in central and eastern Europe were rangebound against the euro, with Hungary’s forint set to snap it’s two-week losing streak after its 50 basis points rate cut earlier this week.
In Singapore, the central bank saw inflation “falling more discernibly” in the fourth quarter and into 2025. Indonesia’s finance minister said they were monitoring impact on the domestic economy of the recent escalation in geopolitical tensions in the Middle East and delays in U.S. monetary easing.
HIGHLIGHTS: ** Vietnam delays launch of new stock trading system
** Pakistan central bank expected to hold rates on Monday ahead of IMF deal, Reuters poll ** Argentina central bank cuts interest rate to 60% as inflation hopes grow
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)