London - Emerging stocks on Friday headed for their best weekly gains in a month, helped by signs of stabilisation in China's economy, while Hungary outperformed for a second day, with stocks at new 9-year highs and bond yields tumbling further.
Chinese and Hong Kong equity markets slipped after data showed growth at the slowest since 2009 but investors were also heartened by other data points which signalled the slowdown in the world's second biggest economy was bottoming out.
That helped MSCI's emerging equity index to inch higher, albeit staying off five-month highs while the dollar's rise from recent lows kept most emerging currencies flat against the greenback.
“[Growth] was a bit better than what people expected - unsurprisingly with an acceleration in credit growth, GDP has ticked up,” said Will Ballard, a fund manager at Aviva Investors. “If you're a man on the street you tend to feel nominal GDP a bit more than real GDP. That comes through in wage inflation - that's broadly positive.”
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Investors in markets such as Russia are also focused on upcoming talks between energy producers to stabilise oil prices which held around $43 a barrel. The rouble was flat to the dollar while Moscow-listed stocks retreated 0.6 percent from eight-year highs.
Hungary has been the standout performer in recent days, and stocks which are at nine-year highs are set for their third straight week of gains while bond yields slipped by around 1 basis point across the curve, traders in Budapest said.
Yields are now below those of investment-grade rated Poland for the first time since 2002.
“Hungarian markets are priced for rate cuts while in Poland expectations of rate cuts have been depressed. The moves do not reflect ratings as much as policy easing expectations,” said Mikhail Liluashvili, an economist at Credit Suisse.
In Turkey, the lira weakened 0.4 percent against the dollar while stocks slipped half a percentage point, retreating from the 10-month high hit on Thursday though still on track for their best weekly gains in a month.
Speaking at a news conference in the morning, Finance Minister Naci Agbal said the budget had produced a 46 million lira surplus in the first quarter of the year and the growth trend was strengthening.
In South Africa, the rand firmed 0.4 percent against the dollar and was on track for solid weekly gains of around 3 percent while stocks extended losses for a second day, slipping by 0.3 percent.
REUTERS