London - Emerging stocks rose for a fifth straight day on Wednesday, with some currencies also strengthening following a dollar sell-off in the wake of weak US data, although an oil price fall capped the upside.
MSCI's emerging market index rose 0.4 percent to a new one-year high, bringing weekly gains so far to almost 2 percent, thanks to gains across Asia and other select markets such as Greece and the Czech Republic.
Some currencies also firmed after US data showed an unexpected slump in productivity, sending the dollar index sharply lower and providing the Federal Reserve with another reason to keep interest rates low for longer.
“There seems to be quite a benign environment for emerging markets at the moment with the Fed not hiking in the immediate future and the prospect of looser policy in both the euro zone and Japan,” said William Jackson, senior EM economist at Capital Economics.
South Africa's rand strengthened 0.3 percent against the dollar, while China's yuan nearly matched the rise.
Turkey's lira gained 0.2 percent after Russian President Vladimir Putin and Turkish President Tayyip Erdogan met on Tuesday to repair their ties and pledged an acceleration in trade and energy links.
The country's customs minister said the diplomatic crisis with Moscow after Ankara shot down a Russian fighter jet near the Syrian border had cost it $1 billion in lost exports in the first seven months of the year.
Also on Tuesday, Turkey's central bank announced a cut to reserve requirement ratios of 50 basis points as part of moves to boost liquidity.
And Nigeria's central bank said it would allow banks this year to write off bad loans for which they have already made provisions to help them to clean up their balance sheets. The bank on Tuesday sold dollars to lift the naira off record lows of around 350 per dollar.
The country's lenders have seen their loan books suffer from the shrinking economy, plunging currency and foreign exchange shortages following a slump in oil prices.
Russia's rouble and the Kazakh tenge weakened 0.1 percent against the dollar, dragged down by oil prices
tumbling more than 1 percent on oversupply worries.
Elsewhere in central and eastern Europe, currencies were chiefly treading water against the euro.
REUTERS