LONDON Aug 22 (Reuters) – Emerging equities eased 0.6
percent on Wednesday on continued weakness in Chinese markets
and a setback for European bourses while on currencies, the
Hungarian forint fell from 11-month highs hit in the previous
session.
Investors are clinging to hopes of policy action from global
central banks especially the European Central Bank, as weak
export numbers from Japan highlighted worries about the fragile
global economy. Poor earnings from London-listed miner BHP
Billiton reinforced these concerns as the company said it would
shelve some copper projects until global demand improved.
Investors in emerging markets have also taken to the
sidelines, watching the rise in U.S. Treasury yields which hit
3-month highs on Tuesday.
In China, Shanghai stocks fell a further 0.5 percent,
staying near recent 3-1/2 year lows as the central bank
has so far steered clear of delivering an expected stimulus.
That pushed the broader emerging index lower while emerging
European stocks also fell, with Russia and Hungary slumping
around 1 percent and South Africa and Poland
losing 0.5 percent
On currencies the forint was the biggest loser, falling 0.5
percent versus the euro after a sharp rise in the
previous session that was fuelled by optimism in eastern Europe
over possible ECB support for Spain and Italy.
The Romanian leu eased 0.3 percent after touching six-week
highs on Tuesday. A constitutional court on Tuesday
struck down a referendum to impeach the country’s president and
the government said it would accept the decision.
However, the currency looks vulnerable to further losses as
it is unclear if the political turmoil will prevent Bucharest
from adhering to the terms of an IMF loan programme.
On bonds, Belize’s 2029 dollar bond traded at
a three-year low of 32 cents on the dollar after ratings
agencies warned investors on Tuesday to expect steep losses on
the bond. Belize has missed the August coupon payment and has
made little headway in its debt restructuring talks.
(Reporting by Sujata Rao; editing by Stephen Nisbet)
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