London - Emerging stocks hit a one-month
low on Thursday though currencies delivered a mixed performance
as the dollar pulled away from its 14-year high, with Russia's
rouble hitting the strongest level in over a week.
MSCI's emerging market index fell 0.8 percent,
having chalked up losses in six of the past seven sessions, with
bourses in Russia , Taiwan, India
and Hong Kong all down around 1 percent.
Yet South Africa's rand and Russia's rouble
strengthened 0.5 percent against the dollar, which edged
lower after hitting a 14-year high on Tuesday.
And US 10-year Treasury yields, a reference point for
emerging market debt, also eased after hitting a more than
two-year high in the wake of last week's Federal Reserve
meeting.
"[It's] a relatively calm backdrop in U.S. dollar and U.S.
Treasuries ahead of the Xmas weekend as oil attempts to find
'comfortable' levels," Simon Quijano-Evans, a strategist at
Legal & General Investment Management, told clients.
Yet other currencies struggled. China's yuan slipped
0.1 percent, weighed down by corporate dollar demand as
persistent downward pressure on bets of more losses offset a
firmer midpoint.
South Korea's won hit a more than nine-month low and
the Taiwan dollar touched a near five-month trough.
"Korea's won [is] clearly suffering from the openness of its
economy and thus vulnerability to global trade risks, economic
underperformance due to corporate issues and strikes, and
political noise that culminated in the impeachment of president
Park (Geun-hye)," said Quijano-Evans.
In Saudi Arabia, the government was expected to release the
budget for 2017, which will boost spending to support economic
growth while raising domestic energy prices to ease the
government's subsidy burden, according to sources.
Investors were also watching out for central bank meetings,
with policymakers in the Philippines keeping interest rates
steady at 3.0 percent as expected.
Central bankers will also meet in Czech Republic, where no
change is expected.
"It could be interesting to see any possible comments
regarding the timing of the exit from the current currency
regime that keeps the exchange rate at slightly above
27, because of the recent, surprising increase in inflation,"
Erste Group analyst Zoltan Arokszallasi wrote in a note.