EM shed 0.2%, currencies added 0.7%
Lira on the eighth monthly decline
Russian ruble, stocks profit
The South African rand has strong trade data ahead
India hikes rates by 50 bps, analysts see further tightening.
Sept 30 (Reuters) – Stocks and currencies in emerging markets were set for their worst quarterly performance since 2020, though it came on Friday, as a stronger dollar wreaked havoc and investors worried about a global economic slowdown.
MSCI’s index of emerging market shares was up 0.2% by 0843 GMT, but it was heading for its fifth straight quarterly loss, the first since its inception in the late 1980s.
The index of emerging market currencies gained 0.7%, but fell 4.5% in the quarter and 8.2% this year.
Last week, the biggest retail hard-currency bond fund pulled out of emerging markets in March 2020 due to fears over the coronavirus, according to a JP Morgan note.
“The biggest driver here is the threat of a global recession and a more hawkish Federal Reserve. You safe-haven behavior and US interest rate differentials are very much alive in EM markets,” said Simon Harvey, head of currency analysis at Monex Europe.
“We’re getting to this point in EM, especially in the Asian markets, where we’re seeing some pressure with this strong dollar narrative.”
China’s yuan strengthened against the dollar after the country’s major banks were told to stockpile yuan in a bid to stem the greenback.
South Africa’s rand strengthened 0.6 percent against the dollar on trade and budget balance data.
The Turkish lira hovered near historic lows against the dollar, while the BIST 100 share index rose 0.2%.
The Hungarian forint rose 0.2% against the euro, a day after hitting a record low, while other central and eastern European currencies were mixed in early trading.
According to the data, the inflation rate of Hungarian industrial producers reached an annual rate of 43.4% in August, from 37.9% in July.
Russian stocks opened higher as President Vladimir Putin prepares to announce the annexation of four Ukrainian regions, a new escalation in Moscow’s conflict with Kiev, and the ruble strengthened to $57 to the dollar last week.
In Asia, the Indian rupee capped gains against the dollar after the Reserve Bank of India raised its benchmark repo rate by 50 basis points.
South Korean President Yoon Suk-yeol has called for more urgency to deal with markets that are under pressure as the losing currency plunges to a 13-1/2-year low on fears of capital flight.
In the year For a GRAPHIC on emerging market FX performance in 2022, see http://tmsnrt.rs/2egbfVh For a GRAPHIC on MSCI emerging index performance in 2022, see https://tmsnrt.rs/2OusNdX
New markets for TOP NEWS
See the report for the Central European market
For the Turkish market report, see
For a report on the Russian market, see
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Alexander Smith)