EM stocks end 6-day winning run, lira jumps
Emerging market stocks ended a six-day winning streak on Friday as dismal data from China reinforced worries over global growth, though the lira jumped sharply after Turkey agreed a ceasefire deal in Syria that could stave off further U.S. sanctions.
MSCI’s index of emerging market shares fell 0.1%, putting it on course to end its longest upwards run since April, as data showed that the bruising U.S.-China trade war pushed the economic growth in China to its weakest pace in nearly 30 years.
Stocks in mainland China fell more than 1%, and most other Asian shares were also in the red. Commodity-rich South Africa, which exports heavily to China, saw its shares shares give up 0.1%, while the Russian index was steady.
A glimmer of light however was provided by growth in industrial production and retail sales in China. These being more current indicators, could be a sign things are starting to get better, and saw ING analysts raising its forecast for fourth quarter growth in a note to clients. While most Asian currencies made no big moves against a steady dollar, the Russian rouble gained 0.3% to hover near three-week highs.
South Africa’s rand firmed 0.6% after the cabinet approved a long-delayed plan for electricity generation until 2030. The plan still needs to be publicly gazetted.
The currency had slumped this week when state power utility Eskom had resorted again to nationwide power cuts. The power outages in February and March had pushed South Africa’s first-quarter economic growth into contraction and threatened the country’s last investment-grade rating. (RTRS)