(The final London emerging report for 2011 will be on Friday,
Dec 23. The report will resume on Tuesday, Jan 3.)
* MSCI emerging stocks up 0.9 percent
* Strong U.S. data lifts risky assets across board
* Rouble rises after c.bank rate move; HUF stabilises
By Natsuko Waki
PARIS, Dec 23 (Reuters) - Emerging stocks edged higher
and currencies were slightly firmer on Friday as strong U.S.
data offered broad support to risky assets, with the rouble
rising after Russia's central bank unexpectedly hiked deposit
rates.
Thursday's U.S. data, showing initial jobless claims fell to
a 3-1/2 year low and consumer morale improved,
underscored a positive momentum in the world's largest economy
at a time when Europe is struggling with a debt crisis.
The benchmark MSCI emerging equity index rose 0.9
percent, outperforming its developed counterpart
which rose a third of a percent. The index is on track to end
the year with a nearly 20 percent loss, wiping out gains of
around 16 percent in 2010.
The rouble was up 0.7 percent at 31.15 per dollar
after Russia's central bank eased its largely-symbolic
refinancing rate by a quarter point to 8.00 percent and raised
its deposit rate, also by a quarter point, to 4.00 percent, in a
decision it said was neutral in policy terms.
The bank left its one-day repo rate - the most relevant
policy rate at a time of tight market liquidity - unchanged at
5.25 percent.
Analysts said the twin shift epitomised the central bank's
policy dilemma. Slowing growth and falling inflation would argue
for looser monetary conditions, but lower interest rates would
exacerbate capital outflows.
"A hike in the deposit rate was rather surprising for the
market. The move could help to sterilise liquidity when its
amount increases after year-end money inflows from the budget.
It is generally positive for the rouble," said Yaroslav
Lissovolik, chief economist at Deutsche Bank.
The Hungarian forint inched up around 0.1 percent to 306.5
to the euro, having fallen 1.6 percent in the previous
session after SP downgraded Hungary's debt to "junk", citing
the government's unpredictable policies and a move to weaken the
central bank's independence.
Despite the downgrade, Hungarian Prime Minister Viktor Orban
said the country still planned to pass a controversial central
bank and financial stability law, in a move which could derail
Hungary's talks about a new deal with international lenders.
"The process of unwinding Hungarian positions has been
going on for a while... The worry will really come next year
when they try to refinance," said Lars Christensen, chief
emerging markets analyst at Danske bank in Copenhagen.
"A Hungarian default is not our main scenario but the
government is playing with fire."
The Polish zloty was unchanged on the day at
4.4380 per euro, while the Czech crown gained 0.1
percent to 25.645 to the euro.
Emerging Markets Prices from Reuters
Equities Latest Net Chg % Chg % Chg
on year
Morgan Stanley
Emrg Mkt Indx 928.16 +8.61 +0.94 -19.39
Czech Rep 899.60 +8.00 +0.90 -26.55
Poland 2152.35 +3.94 +0.18 -21.57
Hungary 17585.86 +123.35 +0.71 -17.54
Israel 1086.18 -6.12 -0.56 -18.11
Romania 4313.24 +5.42 +0.13 -18.13
Russia 1406.02 +9.99 +0.72 -21.96
South Africa 28641.11 +228.08 +0.80 +0.01
Turkey 52172.34 +580.78 +1.13 -20.96
China 2204.78 +18.49 +0.85 -21.48
Brazil 0.00 +0.00 +0.00 -100.00
India 15738.70 -74.66 -0.47 -23.26
Currencies Latest Prev Local Local
close currency currency
% change % change
in 2011
Czech Rep 25.66 25.63 -0.11 -2.56
Poland 4.43 4.44 +0.07 -10.71
Hungary 306.34 306.75 +0.13 -9.26
Romania 4.29 4.29 +0.16 -1.26
Ukraine 8.02 8.03 +0.07 -0.72
South Africa 8.10 8.18 +1.04 -18.48
Kenya 83.55 83.50 -0.06 -3.65
Israel 3.77 3.78 +0.29 -6.67
Turkey 1.88 1.89 +0.33 -18.42
Brazil 1.85 1.86 +0.29 -10.32
Mexico 13.78 13.82 +0.25 -10.33
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBI+ 369 -2 0.03 600.68
(Additional reporting by Sujata Rao; Editing by John
Stonestreet)
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