Emerging Markets: Stocks cheer tempered hawkish Fed bets but China shares cap gains

Rainforest Resources

13/04/2022 10:05

* EM stocks index up 0.8%
    * 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

    By Susan Mathew
    April 13 (Reuters) - Emerging market stocks rose on
Wednesday as overly hawkish bets about the U.S. Federal Reserve
were tempered, while Russian President Vladimir Putin's
description of on-and-off peace negotiations as "a dead-end
situation" kept investors cautious.
    Risk assets received a boost after largely in-line U.S.
inflation data stopped bets about an aggressive Fed from
growing, knocking U.S. Treasury yields and the dollar.
 FRX/  US/ 
    MSCI's index of emerging market shares  .MSCIEF  rose 0.8%,
moving further away from four-week lows, although losses in
heavyweight China stocks capped gains. 
    Amid fears of the war exacerbating inflation and denting
demand and economic growth, data on Wednesday showed China's
dollar imports facing first decline in almost two years over
COVID curbs. But China's overall trade with Russia in March 
outpaced the growth in total imports and
exports. urn:newsml:reuters.com:*:nL3N2W9245 urn:newsml:reuters.com:*:nL3N2W9245
    Ahead of a central bank policy decision on Thursday,
Turkey's lira  TRY=  firmed 0.2%. The policy 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. 
    "Sri Lanka may undertake on their global bonds a coupon
haircut by around 50%, with notional haircut of at least 20%,
and maturity extension ranging from 10 to 13 years," said
Citigroup strategists. 
    "Assuming an 11% exit yield, the 'recovery value' on the
dollar bonds could range in the low to mid 40s."
    Russia's rouble was just below 80 a dollar in Moscow
 RUBUTSTN=MCX , while it was at 80 in the interbank market
 RUB= . 
    Putin on Tuesday promised that Russia would achieve all of
its "noble" aims in Ukraine, and said Kyiv had derailed peace
talks by staging what he said were fake claims of Russian war
crimes.  urn:newsml:reuters.com:*:nL5N2WA1YT
    
        
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)
 ((susan.mathew@thomsonreuters.com; +91-80-6287-2704;))