Emerging Markets: Ukraine, Russia assets soar on peace talk hopes

Greentown China Holdings

13/02/2025 11:00

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      Ukrainian, Russian assets jump on hopes of peace deal
    

        * 
      Markets brace for Trump's reciprocal tariffs 
    

        * 
      Turkish current account deficit widens in December
    

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      MSCI EM FX up 0.2%, stock gain 0.1% 
    

  
 (Updates with prices, quote)
    By Purvi Agarwal
       Feb 13 (Reuters) - Most emerging currencies and stocks
were higher on Thursday as the dollar retreated, while assets in
Russia and Ukraine jumped on the prospects of a ceasefire in
their nearly three-year-old war.
    MSCI's index tracking global EM currencies  .MIEM00000CUS 
was up 0.2%, and the stocks gauge  .MSCIEF  was up 0.1%, after
touching a more than two-month high earlier in the session. 
    Investors were optimistic about emerging European markets,
hoping that U.S. President Donald Trump's phone calls with
Russian President Vladimir Putin and Ukrainian President
Volodymyr Zelenskiy could end their conflict.
    Ukraine's sovereign dollar bonds rallied for a second
consecutive day, gaining as much as 2 cents, with the 2035
maturity adding 1.79 cents to be bid at 60.426 cents on the
dollar.
    The Russian rouble  RUB=  climbed 3% against the dollar, to
its highest since September 24, according to over-the-counter 
market data. Stocks on the Moscow Exchange (MOEX)index surged
more than 4%. The euro  EUR=  advanced 0.3% against the dollar.
    Elsewhere in Europe, currencies in emerging market economies
were little changed against the euro. Stocks in the region
rallied, with Poland's main index  .WIG20  up 0.5% and Hungary's
Budapest stock index  .BUX  up 0.1%. 
    "The CEE economies are expected to be the main beneficiaries
of peace talks... Peace talks would markedly reduce the risk of
a significant escalation that could lead to a full-blown miltary
confrontation between Europe and Russia," said Piotr Matys,
senior FX analyst at In Touch Capital Markets.
    Oil prices fell more than 1%, with investors pricing in a
lifting of sanctions on Russia that have disrupted supply flows.
 O/R 
    "Progress on peace in Ukraine could be an important positive
for European countries should it deliver lower energy prices and
encourage broader investment," analysts at ING said. 
    Meanwhile, a report said that China proposed a summit
between the U.S. and Russian presidents to help end the
conflict.
    Israel's shekel  ILS=  was 0.5% higher, while Tel Aviv
stocks  .TA125  gained 0.8%. 
    Turkey's current account deficit narrowed to $9.97 billion
in 2024 from nearly $40 billion a year earlier. 
    South Africa's rand  ZAR=  was up 0.2%, while stocks in the
resource-heavy country  .JTOPI  were up 0.1%, after hitting a
record high level. 
    Markets also braced for potential reciprocal tariffs from
the United States - in line with Trump's threats - on countries
that impose duties on U.S. imports.
    Elsewhere, the Philippine central bank unexpectedly kept
overnight borrowing rate at 5.75% at its latest policy meeting.
    Greentown China  3900.HK  will buy back $741 million of
outstanding bonds and is also planning to issue U.S.
dollar-denominated notes as part of a debt refinancing plan. 
    
    HIGHLIGHTS:
    
    ** Trump says he backs Ukraine, but early concessions to
Russia spark concerns
    ** India's Modi brings a tariff 'gift' to Trump talks 
    ** Ending US aid will heat up sovereign debt fights
    ** Israel seen as likely to attack Iran by midyear,
Washington Post reports
    
    For TOP NEWS across emerging markets  urn:newsml:reuters.com:*:nTOPEMRG
    For CENTRAL EUROPE market report, see  CEE/ 
    For TURKISH market report, see  .IS 
    For RUSSIAN market report, see  RU/RUB 

 (Reporting by Purvi Agarwal in Bengaluru, Editing by Gareth
Jones and Angus MacSwan)
 ((Purvi.Agarwal@thomsonreuters.com;))