Stocks set for monthly gains on China rebound

EMERGING market stocks eyed strong monthly gains on Thursday, with a Chinese recovery fuelling the bulk of the gains, while most currencies were range-bound ahead of key US inflation data, which is likely to set the tone for rate cut expectations.

At 0901 GMT, MSCI’s index for emerging market (EM) stocks MSCIEF was up 0,1 percent, on track for a monthly advance of 4,5 percent, its best February performance since 2012.

Mainland Chinese shares closed 1,9 percent higher following a more than 1 percent fall in the previous session, with a monthly gain of 9,4 percent snapping a six-month losing streak.

“Investor sentiment has stabilised since China’s markets reopened, in part supported by positive retail spending and travel data from the holiday period,” Wee Khoon Chong, APAC market strategist at BNY Mellon, wrote.

State-led buying and tighter regulations have been primarily responsible for pulling

China’s blue-chip index off five-year lows, but more aggressive stimulus is needed for the momentum to continue amid a moribund economy.

Stocks in emerging Europe also had a bright start, with Turkey’s main index XU100 gaining 0,7 percent while shares in Warsaw WIG20 jumped 1,2 percent.

Turkey’s economy grew 4,5 percent last year and 4,0 percent in the fourth quarter, beating expectations as strong domestic demand offset fallout from devastating earthquakes and a slowdown in main trading partners.

A broader gauge of EM currencies was flat at 1,726.73 points as caution prevailed ahead of the release of the Federal Reserve’s preferred inflation gauge later in the day – the personal consumer expenditures (PCE) price index, which is expected to set the tone for rate cut expectations in the world’s biggest economy. — CNBC Africa