STOCKS SCORE MORE GAINS
DEVELOPING world stocks rose on Friday, to register a second consecutive week of gains on increased signs that the world’s largest economy would soon emerge from coronavirus lockdown.
Adding to the optimism was a report detailing encouraging partial data from trials of US company Gilead Sciences’ experimental drug remdesivir in severe Covid-19 patients.
MSCI’s index of emerging market stocks rose about 1.8 percent and finished the week up 1.5 percent.
Turkish equities both gained nearly 2 percent.
US President Donald Trump on Thursday unveiled a three-stage plan to exit the US lockdown and restart the economy.
This came after signs that the outbreak may have peaked in US and European epicentres, which bolstered risk appetite and pushed emerging markets further above lows hit in earlier stages of the outbreak.
Still, analysts warned of a long, arduous path to recovery from the economic impact of the pandemic, with China on Friday reporting a March-quarter contraction in economic growth for the first time on record.
A record 22 million Americans have sought unemployment benefits over the past month, with millions more filing claims last week, almost wiping out all the gains since the Great Recession.
“A global recession remains the base case for the year and the economic outlook remains clouded with uncertainties.
“While policymakers are eager to limit the economic damage, the reopening of their respective countries could be upended by a swift resurgence of the coronavirus,” FXTM analysts wrote in a note.
“The broad rollout of a Covid-19 vaccine is still the necessary catalyst for a return to life as it once was and would be the spark required for a sustained rally in risk assets.”
This caution was partially reflected in forex activity, with most emerging market currencies gaining marginally or weakening despite a pause in the dollar’s safe-haven rally.
The MSCI’s index of emerging market currencies traded flat for the day and set to lose about 0.6 percent on the week.
Hungary’s forint edged up against the dollar while shares added about 1.4 percengt. Most other central European markets were in positive teritory, albeit only just.