LONDON Aug 17 (Reuters) – Emerging equities traded flat on
Friday and were on track to snap a four-week long winning
streak, weighed down by China which has lost 2.5 percent in the
past week on fears of a sharp slowdown in economic growth.
The sole bright spot was Turkey, where stocks jumped 1
percent as banks gained from expectations of looser policy.
Emerging markets shrugged off the generally more positive
mood in Western Europe where shares have hit five-month highs on
hopes euro zone policymakers may resolve their differences over
tackling the bloc’s debt crisis.
The MSCI emerging index is down 0.5 percent this
week. Chinese stocks had their worst week since early
June and are approaching the 3-1/2 year lows hit at the end of
July. Markets in Seoul and Taipei also fell.
Data on Wednesday showed a fall in foreign direct investment
into China in the first seven months of the year. This follows
a raft of softer economic indicators that appear to confirm an
imminent downturn in growth. Markets have so far shrugged off
policymakers’ hints of more monetary stimulus.
“The message from the Shanghai Composite (equity index) is
that monetary policy may be becoming less tight but it is not
accommodative,” ING analysts said in a note.
The yuan was flat but offshore non-deliverable forwards
implied a 1.3 percent depreciation over the next
12 months, compared to 1.2 percent implied on Thursday.
Most emerging European currencies eased, with the Czech
crown edging off 3-month highs versus the euro.
Turkey led regional equity gains, with a 1 percent rise
, led by banks which benefit from the central
bank move to allow more reserves to be held in hard currency and
gold. The central bank kept interest rates on hold on Wednesday
but signalled looser policy going forward.
Emerging markets continue to attract investors, with equity
funds taking $874 million in the week to August 15 and
year-to-date flows at $17 billion, according to EPFR Global.
Emerging bond funds absorbed $586 million, with year-to-date
inflows at $19.7 billion, the fund tracker was quoted by banks
as saying.
© Thomson Reuters 2012 All rights reserved
