Emerging Markets: China slide limits gains for emerging market shares

Rainforest Resources

13/04/2022 12:04

* EM stocks index up 0.7%
    * China's imports unexpectedly fall on domestic COVID curbs
    * Turkish exporters may have to sell 40% of FX revenues to
c.bank 
    * Offshore rouble at 80/$, onshore strengthens to just below
80

 (Adds comment, updates prices)
    By Susan Mathew
    April 13 (Reuters) - China shares limited gains for emerging
market stocks on Wednesday, as weak imports data from the
country added to fears of slowing global economic growth.
    With the ongoing Russia-Ukraine war exacerbating fears of
rising inflation and falling demand, data on Wednesday showed
China's imports unexpectedly fell in March over COVID curbs. In
Japan, core machinery orders posted their biggest monthly fall
in nearly two years in February.  urn:newsml:reuters.com:*:nL3N2WA1GF  urn:newsml:reuters.com:*:nL3N2W9245
    MSCI's index of emerging market shares  .MSCIEF  rose 0.7%,
moving further away from four-week lows, but mainland China
shares  .SSEC   .CSI300  lost almost 1%.  .SS 
    "The war in Ukraine has sparked concern about surging global
food prices and food supply in emerging markets... an important
consequence is that food inflation will hit fresh multi-year
highs in many EMs this year," said Liam Peach, EM economist with
capital Economics. 
    "It will also aggravate external imbalances in many
countries. Large food importing countries, such as those in
North Africa, will experience larger import bills at a time when
they are already rising due to higher oil prices."
    Dampening prospects for peace talks, Russian President
Vladimir Putin said on-and-off negotiations with Kyiv was "a
dead-end situation", and promised that Russia would achieve all
of its "noble" aims in Ukraine.  urn:newsml:reuters.com:*:nL5N2WA1YT
    Russia's rouble was just below 80 a dollar in Moscow
 RUBUTSTN=MCX , while it was at 82 in the interbank market
 RUB= . 
    Turkey's lira  TRY=  gave up early gains to trade flat ahead
of the central bank's policy decision on Thursday. They key
interest rate is seen unchanged at 14% and the unorthodox policy
is likely to continue despite an expected further rise in
inflation after it hit 61% last month, a Reuters poll showed.
 urn:newsml:reuters.com:*:nL3N2W929T
    Sources said Turkey's central bank was considering raising
the share of foreign currency revenues that exporters are
required to sell to the bank to 40% from 25% now.  urn:newsml:reuters.com:*:nL2N2WA1KE
    "Such FX sales will, however, not help the lira's
fundamentals significantly – it would boost CBT's FX reserves
modestly, at the cost of smaller FX balances at other banks, but
this in no way would support the lira exchange rate," said Tatha
Ghose, FX and EM analyst at Commerzbank. 
    In Sri Lanka, the prime minister offered talks on Wednesday
with protesters calling for the government to step down over its
handing of an economic crisis.  urn:newsml:reuters.com:*:nL3N2WB1EQ
    The country's 2027 sovereign dollarbond  USY8137FAH11=TE 
rose, while the 2026 bond  USY8137FAF54=TE  slipped. Both had
hit record lows this week. 
    
        
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 

 (Reporting by Susan Mathew in Bengaluru; Editing by Krishna
Chandra Eluri and Shailesh Kuber)
 ((susan.mathew@thomsonreuters.com; +91-80-6287-2704;))