Emerging Markets: Property sector weighs on China stocks; lira rallies

Modern Land (China)

26/10/2021 09:24

* Most other bourses outside China rise
    * MSCI EM stocks index up 0.2% 
    * Turkish lira up 1.5% as diplomatic tension eases
    * South African rand underperforms 

    By Susan Mathew
    Oct 26 (Reuters) - Property and technology stocks led losses
in China on Tuesday but gains in most other bourses sent an
index of emerging market (EM) shares closer to one-month highs,
while Turkey's lira firmed 1.5% after sliding to record lows.
    China real estate indexes  .CSI000952   .HSMPI  fell 2.8%
and 4.5% after property developer Modern Land  1107.HK 
defaulted on a payment, and as the sector digested Beijing's
decision to roll out a pilot real estate tax in some regions.
 urn:newsml:reuters.com:*:nL1N2RJ05C urn:newsml:reuters.com:*:nL1N2RM05A
    "The Modern Land missed debt payment has seen property
sector nerves return to China markets," said Jeffrey Halley,
senior market analyst, Asia Pacific at OANDA. 
    "Evergrande, the centre of the China property storm, has
another grace period payment due this week on 29 October, and
nerves will be taut until it does, or does not, make payment." 
    Mainland China shares  .SSEC   .CSI300  lost around 0.3%,
while Hong Kong's main index  .HSI  slipped 0.4% as losses in
big technology names such as Tencent  0700.HK , Alibaba
 9988.HK  and Meituan  3690.HK  also weighed.  .SS 
    Most other EM Asian indexes gained between 0.2% and 0.9% and
those in Turkey  .XU100  and South Africa  .JTOPI  gained 1% and
0.4%, on some friendly tones between the United States and China
about bilateral relations, as well as upbeat earnings on Wall
Street. MSCI's index of EM shares  .MSCIEf  was up 0.2%.  .N 
    But keeping sentiment in check were rising COVID-19 cases
and familiar fears of containment measures denting economic
growth. 
    Beijing stepped up curbs, Moscow is set to introduce its
tightest lockdown measures since June 2020, while tougher
restrictions came into force in some eastern European countries
as cases surge.  urn:newsml:reuters.com:*:nL8N2RL2P6 urn:newsml:reuters.com:*:nL1N2RM07C
    Turkey's lira  TRY=  rallied after stumbling to an all-time
low of around 9.8 to the dollar on Monday, as President Tayyip
Erdogan backed away from escalating diplomatic tensions with the
West. urn:newsml:reuters.com:*:nL8N2RL4DA urn:newsml:reuters.com:*:nL1N2RL07Y
    The lira is down more than 20% this year, thanks to worries
about monetary policy, geopolitics and depleting foreign
exchange reserves.  
    South Africa's rand  ZAR=  lost 0.1% to trade 14.72 per
dollar. State power utility Eskom said it was extending
scheduled power cuts until Saturday. Eskom's regular outages due
to capacity issues have held back economic growth in Africa's
most industrialised nation.  urn:newsml:reuters.com:*:nL1N2RM0AW
    "After last week's late rally the USD/ZAR has found
resistance at the 14.85/dollar mark. This level is pretty much
the centre of a short term range for the (pair)," said Shaun
Murison, senior market analyst at online trading provider IG. 
    South Africa's central bank composite leading business cycle
indicator rose 0.7% month on month in August thanks to more
vehicle sales and job adverts, data showed on
Tuesday. urn:newsml:reuters.com:*:nJ8N2KH01G

        
For GRAPHIC on emerging market FX performance in 2021, see http://tmsnrt.rs/2egbfVh

For GRAPHIC on MSCI emerging index performance in 2021, see https://tmsnrt.rs/2OusNdX
    
    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 

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Under pressure: Turkey FX reserves    https://tmsnrt.rs/310jhKY
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 (Reporting by Susan Mathew in Bengaluru;
Editing by Robert Birsel)
 ((susan.mathew@thomsonreuters.com; +91-80-6287-2704;))