* German GDP numbers erode recent emerging market gains
* Turkish lira up on current account deficit data
* Hungarian forint recovery peters out; Egyptian pound at
record low
By Sebastian Tong
LONDON, Jan 11 (Reuters) – Emerging markets were flat
on Wednesday as concerns about the euro zone returned to the
fore while the Turkish lira rose to its strongest level since
the start of the year, emboldened by a smaller-than-forecast
November current account deficit.
Hungary’s forint eased against the euro after recovering
nearly 4 percent from Thursday’s record low even as its
government struck a more conciliatory note in talks with
international lenders while the Egyptian pound sank to new lows
despite the expected start of talks with the International
Monetary Fund this week.
Data showing Germany gross domestic product shrinking
quarter-on-quarter in last three months of 2011 refocused
investor attention on the depth of the challenges faced by the
euro zone, eroding some of the recent market gains prompted by
signs of economic revival in the U.S.
“We are still in fairly illiquid markets and a lot of
investors are being quite tentative at this point. Europe is
still the epicentre of the market’s concerns,” said UBS
strategist Manik Narain.
“The market is concerned ahead of the bond redemption that
the Greek government will face in March. There is risk of a
coercive debt restructuring. It’s a sword of Damocles hanging
over Europe and people are being quite cautious,” he said.
Continued…
