* Emerging stocks drop 1 pct, debt spreads widen
* Oil exporter Russia’s stocks hit 6-mth highs
* Israeli shekel hits 6-week lows before rate decision
By Carolyn Cohn
LONDON, Feb 27 (Reuters) – Emerging stocks dropped 1
percent on Monday as higher oil prices dented risk appetite and
raised concern about oil-importing emerging economies, but oil
exporter Russia’s stocks hit six-month highs.
Oil prices have risen sharply in the past week on worries
that tension over Iran’s disputed nuclear programme could lead
to a disruption in Middle East supplies, though Brent crude
slipped below $125 on Monday.
Rising oil prices are likely to lead to inflation in
emerging economies, making it harder to ease monetary policy.
“The markets are beginning to fret about the implications of
higher energy prices and it is negative for emerging market
currencies and equity markets,” said Manik Narain, emerging FX
strategist at UBS.
“S ome of the economies like Turkey and India
are getting hit hard , especially as they
have very large external deficit
positions . ”
Continued…
