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EMERGING MARKETS-EM stocks at five-week high ahead of c.bank meets; Turkey's lira slips

Credit: REUTERS/MURAD SEZER

Emerging market stocks rose on Wednesday as investors piled into riskier assets on the prospect of a ramping up of stimulus in major economies, while Turkey's lira extended its longest losing streak since May on bets of another super-sized interest rate cut.

By Medha Singh and Agamoni Ghosh

Sept 11 (Reuters) - Emerging market stocks rose on Wednesday as investors piled into riskier assets on the prospect of a ramping up of stimulus in major economies, while Turkey's lira extended its longest losing streak since May on bets of another super-sized interest rate cut.

MSCI's index of developing world stocks .MSCIEF gained 0.6% to hold on to five-week highs as equities benefited from a broad "risk-on" mood in global markets.

Most Asian indexes rose, led by Hong Kong shares .HSI, up 1.6% as activists called off anti-government protests in remembrance for the Sept 11, 2001 attacks on the United States. Stocks in South Korea .KS11 and Taiwan .TWII followed suit.

Mainland China stocks .SSEC, .CSI300 lagged, ending lower despite the scrapping of quota restrictions in two major inbound investment schemes on Tuesday, as conflicting signals over progress in U.S.-China trade negotiations kept investors on the sidelines. .SS

In a conciliatory gesture, China said it would exempt 16 types of U.S. products from additional retaliatory tariffs starting Sept. 17, which will be valid for a year.

A senior White House adviser however, played down expectations for the next round of talks.

"There are still many uncertainties in the coming trade talks. An exemption list of just 16 items will not change China's stance," ING's Greater China economist Iris Pang wrote in a note.

"We believe that China will stand very firm in the negotiations, which will be similar to the last round of talks."

Outside Asia, Moscow .IMOEX and Istanbul stocks .XU100 moved between 0.5% and 0.7% higher.

But Johannesburg's JTOPI .JTOPI dropped 1.8%, weighed down by a steep slide in shares of e-commerce group Naspers NPNJn.J, which listed its global empire of consumer internet assets under the name of Prosus PRX.AS on the Amsterdam exchange.

Most emerging market currencies made nominal moves as investors remained squarely focused on central bank meetings this week, starting with Poland's monthly decision on interest rates due later in the day.

The Polish zloty EURPLN= was little changed against the euro ahead of the rate decision, at which analysts expect interest rates to remain at 1.5%, according to a Reuters poll.

More closely watched will be the European Central Bank's monetary policy meeting on Thursday, with markets hoping for a stimulus package from outgoing President Mario Draghi.

"At the risk of sounding like a broken record, it's the fiscal bazooka that's needed now, not the worn out monetary one," said Kit Juckes, currency strategist at Societe Generale.

Turkey's lira TRY= fell 0.3% to extend its longest losing streak since May ahead of an expected interest rate cut on Thursday.

The central bank, which slashed its key interest rate by 425 basis points to 19.75% last month, is under pressure to continue the downward trend as President Tayyip Erdogan looks to achieve an economic growth target of 5% in 2020.

South Africa's rand ZAR= shed 0.4%, having climbed nearly 1% in the previous session after ratings agency Moody's said on Tuesday the country was unlikely to suffer a credit downgrade to junk status in the short term.

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB

(Reporting by Medha Singh and Agamoni Ghosh in Bengaluru; Editing by Alex Richardson)

((medha.singh@thomsonreuters.com; within U.S. +1646 223 8780, outside U.S. +91 80 6749 1130))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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