Emerging stocks rebound from worst day since Brexit vote

Emerging market stocks were on track to snap a six-session losing run on Friday, while Turkey’s lira weakened ahead of a hearing for a detained US pastor which has strained the country’s ties with Washington.

Solid gains in Taiwanese, Indian and South Korean shares helped drive MSCI’s index of developing world stocks 2.2 percent higher, after Thursday’s 3.2 percent fall, its biggest daily fall since a bout of market turmoil around Britain’s vote to leave the EU two years ago.

Those moves tracked a general improvement in appetite for risk among investors globally, with developed world stock markets recovering after a dramatic two-day slide on Wall Street.

“We’re seeing a bit of a rebound in EM stock markets today...we saw a similar occurrence earlier this year when US stocks came under pressure and that automatically improved, and that might be what we’re seeing this time around as well,” said Jason Tuvey, senior emerging markets economist at Capital Economics.

The index was still on course to end lower for a third straight week and has lost around $1 trillion in value this year as rising US interest rates, a strong dollar and an escalating US-China trade war bear down on sentiment.

Turkey’s lira gave up early gains to weaken 0.4 percent ahead of another hearing in the trial of US pastor Andrew Brunson which has weighed on its ties with the United States. US media reports said his release had been agreed with Ankara but the State Department said it was unaware of any such deal.