* Emerging shares at four-month highs, buoyed by Fed pledge
* Polish zloty at 4-1/2 month highs on strong GDP data
* Underperformers Turkey, Hungary benefiting from rally
By Sebastian Tong
LONDON, Jan 27 (Reuters) – Emerging markets touched
multi-month highs on Friday as the promise of a fresh round of
Federal Reserve stimulus offset investor anxiety over the euro
zone.
Poland’s zloty edged up to a fresh 4-1/2 month high as
forecast-beating 2011 GDP figures strengthened expectations of
more hawkish monetary policy, while appetite for Turkish and
Hungarian assets pushed the lira and the forint to their
strongest levels in weeks.
The Fed’s mid-week pledge to keep rates near zero until late
2014 supported the mood, as did Fed Chief Ben Bernanke’s
comments that the central bank is ready to provide additional
stimulus to spur economic recovery.
“We’ve had the signal that QE3 is on its way at the March or
April Fed meetings and quantitative easing in the past has been
beneficial to risky assets in general,” said Neil Shearing,
senior economist at Capital Economics.
“Valuations are pretty cheap and most emerging economies are
in generally good shape. If we get a sustained recovery in risk
appetite, this rally could go on for a while longer although
there are problems yet to be fully addressed in the euro zone.”
Continued…
