LONDON, July 24 (Reuters) – Emerging stocks hovered above
the previous day’s 3-1/2 week lows on Tuesday, as data showing a
slight improvement in manufacturing activity in China took some
of the edge off worries that Spain may need a sovereign
bail-out.
Chinese stocks ended up 0.2 percent on China’s flash
July PMI data rising to its highest since February. But the
market hit its lowest this year earlier in the session on
concern about China’s slowing economy.
There was little comfort from the euro zone, to which
emerging Europe is heavily exposed, with the euro zone flash
services PMI coming in at 47.6 in July, slightly above
expectations, but manufacturing at a lower than expected 44.1.
Emerging stocks dipped 0.17 percent after plunging
2.6 percent on Monday on concern that Spain may need a sovereign
bail-out after the Valencia region asked for cash.
A downgrade by Moody’s to Germany’s rating outlook late on
Monday added to the sour tone, while Spanish short-term debt
costs jumped on Tuesday.
Russian stocks hit their lowest in nearly four
weeks, hurt by euro zone worries and despite a rise in oil
prices.
Most emerging European currencies steadied, though the
Romanian leu hit a fresh record low ahead of a July 29
referendum to decide whether to impeach President Traian
Basescu.
Romanian five-year credit default swaps rose eight basis
points to their highest since early June, according to Markit.
The forint was steady ahead of an expected
no-change Hungarian rate decision, though some analysts saw
optimism over credit talks with the IMF providing a window for a
small rate cut.
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