LONDON, July 4 (Reuters) – Emerging stocks ticked up to
fresh six-week highs on Wednesday, supported in holiday-hit
trade by hopes of easing monetary policy in the euro zone, with
Turkish stocks hitting three-month highs on falling monthly
consumer prices.
Riskier emerging markets have been surging since euro zone
leaders surprised investors last week with the extent of the
progress made at their summit in tackling the protracted debt
crisis.
Markets are getting a further fillip from expectations the
European Central Bank will cut rates on Thursday to stimulate
the ailing region’s economy.
Market volume is likely to be dampened on Wednesday,
however, by the U.S. Independence Day holiday.
Benchmark emerging equities steadied after hitting
their highest since May 14. Stocks have rallied 6 percent since
Thursday and are up more than 4 percent on the year, after
falling over 20 percent in 2011.
Turkish stocks hit three-month highs, with markets
positioned for a possible rate cut after June inflation data on
Tuesday undercut expectations.
“The chances of a cut in the overnight rates and a generally
lower rate backdrop have clearly increased,” said Simon
Quijano-Evans, chief EEMEA economist at ING, in a client note.
Emerging sovereign debt spreads are also trading at
their tightest in six weeks.
The zloty hit its highest in two months before
easing 0.3 percent ahead of an expected no-change rate decision,
while the forint dipped from the previous session’s
two-month highs.
(Reporting by Carolyn Cohn; editing by Ron Askew)
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