* Shares flat to lower, China index fall weighs
* Romanian CDS fall 7 bps, leu flat despite politics
* Hungarian stocks down 1.5 pct ahead of PM speech
By Alessandra Prentice
LONDON, Feb 7 (Reuters) – Emerging markets edged away
from five-month highs on Tuesday, as investors awaited concrete
progress on Greek debt talks, while Russia’s rouble firmed and
its stocks touched multi-month highs a day after data showed
record-low inflation.
Gains on the emerging equities index, which has soared more
than 14 percent since the start of 2012, were also limited by a
1.6 percent slump in Chinese stocks after hopes for an imminent
cut in Chinese bank reserve requirements were doused.
. China comprises almost 20 percent of the
emerging index.
The MSCI emerging stocks index inched down 0.2
percent, hovering just off August 2011 highs, while emerging
sovereign debt spreads narrowed three basis points to
344 bps over U.S. Treasuries.
Market optimism at the prospect of a second long-term
refinancing operation (LTRO) from the European Central Bank,
which will provide cheap money to euro zone banks later in
February, is mitigated by uncertainty over the euro zone’s
debt-laden southern members, said Guillaume Salomon, emerging
markets strategist at Societe Generale.
“The market is in a bit of transition at the moment. On the
positive side there are debates about liquidity and more
quantitative easing, while the negative is the ongoing concern
about Greece and the likes,” Salomon said.
Continued…
