Emerging market stocks regain poise after tough start to year

Mar 28 2014, 16:33 IST
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The MSCI index of emerging shares climbed for its sixth straight session to the highest in almost three months. Reuters The MSCI index of emerging shares climbed for its sixth straight session to the highest in almost three months. Reuters
SummaryEmerging market stocks were set for their biggest weekly rise in nine months.

Emerging market stocks were set for their biggest weekly rise in nine months on Friday as calm in Crimea and reports that China would fast track infrastructure spending helped repair some of the damage of a turbulent few months.

The MSCI index of emerging shares climbed for its sixth straight session to the highest in almost three months as it fought to avoid its worst start to a year since the financial crisis erupted in 2008.

Although geopolitical tensions between Russia and the West over Ukraine continue to create uncertainty, there was fresh evidence that beaten down emerging market assets were starting to tempt back investors.

Figures from EPRF showed the recent rushing tide of outflows from emerging market equity funds had all but ceased globally and were even moving in the other direction again in parts of Europe and Latin America.

"Are we close to the bloom phase for global emerging markets? We are definitely getting there, but not quite yet," said Societe Generale's Benoit Anne, who cited a SocGen survey showing 70 percent of its clients were now "bullish" on EM.

Russian stocks added 0.6 percent as they headed for their second successive week of gains, while Turkish and Hungarian share markets were both on a tear.

Istanbul was up 2 percent and heading for a weekly rise of almost 6 percent on hopes that weekend local elections will bring stability. Budapest jumped 1.1 percent after S&P removed the threat of a downgrade from Hungary's sovereign rating.

CHINA STIMULUS

It has been a bruising few months for many EM assets, as political unrest in countries such as Ukraine, Turkey and Thailand has exacerbated longer-held worries about U.S. stimulus withdrawal and a slowdown in China's giant economy.

While shares in Beijing inched lower on Friday, sentiment was given a boost as China's Premier Li Keqiang sought to reassure jittery global investors that Beijing was ready to support the Asian giant's cooling economy.

"We have gathered experience from successfully battling the economic downturn last year and we have policies in store to counter

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