LONDON, Sept 12 (Reuters) – Emerging equities rose to
one-month highs on Wednesday, extending gains after a German
court removed a key hurdle to resolving the bloc’s debt crisis
and expectations firmed of additional economic stimulus from the
United States and China.
Germany’s constitutional court ruled that the country can
ratify the euro zone’s bailout fund and budget pact, though it
gave parliament veto powers over any future increases in the
size of the fund.
MSCI’s main emerging index was up 0.7 percent for
its fifth straight session of gains, helped by a 0.3 percent
rise for the Shanghai market after President Wen Jiabao
spurred hopes of more steps to stimulate growth.
“Risk should move from neutral to positive on the
constitutional court ruling,” said Luis Costa, head of CEEMEA FX
and debt strategy at Citi.
He said attention would shift to Thursday’s U.S. Federal
Reserve meeting, with markets pricing in a high probability that
the bank could announce when it will start printing money again.
That has spurred sharp gains in emerging assets, with stocks
rising almost 5 percent in the past week while emerging
currencies have also rallied sharply.
Central European currencies, however, eased, with the Czech
crown inching down from one-year highs versus the euro
and the Polish zloty pulling back from a three-week high
.
The rouble rose 0.4 percent against the dollar to the
highest since mid-May. Citi’s Costa said it was being boosted by
reports that state-run Sberbank was preparing to float a 7.6
percent stake to raise up to $5 billion
“There is support from the rouble from the impending stock
sale by Sberbank, that could suggest more..inflows,” he said.
Continued…
