LONDON Aug 23 (Reuters) – Emerging stocks rose nearly 1
percent towards their highest in over three months and sovereign
debt spreads traded around their tightest in a year on Thursday
after the U.S. Federal Reserve signalled more policy easing was
on its way.
The Fed is likely to deliver another round of monetary
stimulus “fairly soon” unless the economy improves considerably,
minutes from its latest meeting suggested on Wednesday.
Riskier emerging markets have benefited from the hunt for
yield triggered by monetary easing by developed market central
banks in the past few years.
Benchmark emerging equities gained 0.85 percent
and emerging sovereign debt spreads edged in by one
basis point over U.S. Treasury yields, which dipped from recent
three-month highs.
Chinese stocks ended higher after resources stocks
were buoyed by local media reports of support for high-energy
consuming industries, despite a disappointing Chinese factory
survey for August.
Russian stocks rose over two percent as oil jumped
more than $1 a barrel above $116. Russia’s five-year
credit default swaps fell five basis points to 158 bps,
according to Markit, close to their lowest levels in a year,
while Hungary’s 5-year CDS, which have plummeted 200 bps this
year, edged down a further 2 bps to 425 bps.
Emerging European stocks and currencies were generally
stronger, though prices slipped after euro zone flash PMIs
signalled recession in the main trading partner of emerging
Europe.
Czech stocks hit four-month highs and Turkish stocks
rose to their highest since May 2011.
(Reporting by Carolyn Cohn)
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