Emerging market shares saw their biggest rise in almost three weeks on Monday, as a fresh high for world stocks and a pause in the dollar’s upward march helped halt a recent selloff in the top performing asset class.
The main gains came in Russia where firming oil prices lifted the rouble off a 2-month low, in Turkey where the lira also rebounded and in Poland as its stock market climbed for a fourth straight session.
Central Europe’s Czech crown was also hovering near a 4-year high against the euro, maintaining its position as 2017’s top global FX performer ahead of what is expected to be a second interest rate hike of the year on Thursday.
“One of the things that may have supported EM investor sentiment is the strong U.S. Q3 GDP number and the rise in U.S. equities on Friday night,” said Capital Economics emerging market economist William Jackson.
It wasn’t all one way traffic however. South Africa’s rand was back in reverse having hit an 11-month low last week following jarring ‘mid-term’ budget forecasts which fanned fears about its remaining investment grade credit ratings.
“We may not be in a recession, but it is quite doubtful that the 2.5 percent momentum of the second quarter (GDP growth) can be sustained,” South Africa’s deputy central bank governor Daniel Mminele said in a speech on Monday.
Local data due this week include September trade figures and third-quarter unemployment numbers.
Yields on Chinese 10-year treasury bonds also rose to their highest level since October 2014, amid signs of a further clampdown by Beijing on riskier types of lending.
Shanghai stocks posted their biggest one-day slide in 11 weeks too as expectations of a new wave of initial public offerings also weighed on traders’ sentiment.
China’s securities regulator had approved nine IPOs on Friday that will raise a total of 9.5 billion yuan ($1.43 billion), more than double the average funds raised in the past weeks.
A weaker dollar had helped most of the rest Asia’s developing markets.
Thailand’s baht rode its biggest rise in almost three weeks and South Korea’s won was up 0.6 percent at its highest since Sept. 1
South Korea’s foreign ministry said Lee Do-hoon, its representative for six-party nuclear talks, and his Chinese counterpart, Kong Xuanyou, will meet in Beijing on Tuesday.
Taiwan shares were lifted by a gain of over 1 percent in its semiconductor index. Apple said last week that pre-orders for iPhone X were “off the charts”.
Back in Africa, Kenya’s 2024 sovereign dollar bond was trading up 0.18 cents at its highest since mid-September, according to early morning Tradeweb prices, after re-run presidential elections late last week.
Opposition leader Raila Odinga had called for calm on Sunday as he visited a slum in the capital Nairobi hit by violence as the stand-off over the elections fed rising ethnic tensions.Tags: biggest