Emerging Markets: Stocks rise as oil prices ease; focus on upcoming IMF meetings

OTP Bank Nyrt.

09/10/2026 10:47

Kenya expects budget deficit to rise to 5.9% of GDP in 2027/28
Hungary plans renewable energy push to curb prices, import needs
Poland may need rate hike in November, central banker says
Turkey to submit draft fund liquidation bill to parliament soon
By Johann M Cherian
Oct 9 (Reuters) - Emerging market stocks rose on Friday and currencies steadied as concerns over a near-term flare-up in US-Iranian fighting eased, although elevated oil prices and government bond yields kept investors cautious. 
MSCI's emerging market equities index .MSCIEF gained 0.5%, but remained on track for a modest weekly loss after losses earlier in the week. 
A parallel gauge tracking emerging-market currencies .MIEM00000CUS was little changed and headed for a small weekly gain against the dollar.
Higher oil prices have been a key concern for investors in recent weeks, pushing borrowing costs higher and increasing pressure on public finances, particularly in heavily indebted economies.
While most emerging markets are in a stronger position than in the post-pandemic period of 2022, some economies remain vulnerable.    
"The countries which are struggling more than others are definitely the ones who have a big dependence on oil. One big country to highlight is India, another smaller country to highlight is Egypt," said Zin Bekkali, CEO of Silk Invest.
Indian equities .NSEI, .BSESN rose more than 1% as oil prices fell  about 1% after President Donald Trump said the US would not attack Iran before next month's midterm elections.
Ahead of next week's International Monetary Fund and World Bank meetings in Bangkok, the UK-backed London Coalition on Sustainable Sovereign Debt published two guides aimed at helping banks, export credit agencies and other private lenders navigate sovereign debt restructurings.
        
FISCAL BALANCES IN SPOTLIGHT
Kenya said its budget deficit for the next fiscal year is expected to widen to 5.9% of gross domestic product from 5.5% in 2026/27, while net external financing was projected to rise about 71% to 423.8 billion shillings.
The Kenyan shilling KES= and the country's dollar bonds 491798AH7=, 491798AS3= were broadly steady.
Elsewhere, governments continued to look for ways to strengthen public finances.
Hungary is planning a major expansion of renewable energy to reduce high import dependence and lower electricity costs for companies. The forint EURHUF= rose 0.2%, while local stocks .BUX gained 2.4%, with lender OTP OTPB.BU up 5.6% after securing approval for its share buyback plans.   
Czech stocks .PX showed signs of stabilising near a more than three-month low hit on Thursday, when lawmakers considered potential taxes on banks alongside energy companies.
Poland's zloty PLN= held its ground at 3.9 per euro after the central bank left interest rates unchanged earlier this week. However, policymaker Ludwik Kotecki said a 25-basis-point rate increase in November would be necessary if updated inflation forecasts point to persistent price pressure into late 2027 or early 2028.
In Turkey, a lawmaker said draft legislation governing the liquidation of investment funds was expected to be submitted to parliament within days. 
Concerns over a banking-sector scandal triggered a stock market selloff last month, and analysts have warned it could weigh on the economy. On Friday, Turkish stocks .XU100 were little changed.

 (Reporting by Johann M Cherian in Bengaluru. Editing by Mark Potter)
 ((johann.mcherian@thomsonreuters.com;))