By Shreyashi Sanyal
July 16 (Reuters) - Emerging market stocks fell to a one-week low on Thursday as tensions between the United States and China and rising coronavirus cases around the world weighed on investor sentiment, while a stronger dollar hit risky currencies.
A broad dispute between Washington and Beijing over the control of advanced technologies and the protection of civil liberties in Hong Kong continued to hit risk appetite.
"The focus currently lies in Hong Kong, but there are fears that the trade dispute between the two superpowers could flare up again at any time," analysts at AxiCorp wrote in a client note.
It also took the shine off data which showed China's economy rebounded more than expected in the second quarter from a record contraction.
While emerging market equities have recovered sharply from a steep downturn in March, surging COVID-19 cases in hotspots like Brazil, India and Russia constantly serve as a reality check for investors hoping for a "V"-shaped recovery.
The MSCI's index for developing world stocks .MSCIEF dropped 1.6%, after rising in the previous session on signs of progress in the development of a coronavirus vaccine. The index is now on track for its first weekly decline in three weeks.
"The market reaction to progress on the vaccine shows how critical it is for broader risk appetite to find a cure. The market's definitive shift to 'risk-on' during Q2 was primarily predicated on an economic splurge alongside an emergence from lockdowns," analysts at AxiCorp wrote.
South African stocks .JTOPI slid 2%, with declines from global miner Anglo American AGLJ.JAAL.L weighing.
Anglo American posted an 18% decline in overall second quarter output due to coronavirus lockdowns and stuck to its full-year guidance for copper, other metals and diamonds.
The rand ZAR= slipped 0.5% against the U.S. dollar, which strengthened amid growth concerns and weak Chinese consumption data. FRX/
Russia's rouble RUB= weakened with a slide in oil prices, while the Turkish lira TRY= traded within a tight range.
Turkish stocks .XU100 rose 1.3%, among few advancers on the day as shares in Turkish Airlines THYAO.IS and budget carrier Pegasus Airlines PGSUS.IS rose more than 3% after Turkey and Russia agreed to resume flights.
Currencies of countries in central and eastern Europe remained rangebound, with Hungary EURHUF=, Poland EURPLN= and Romania EURRON= trading flat against the euro.
For GRAPHIC on emerging market FX performance in 2020, see http://tmsnrt.rs/2egbfVh
For GRAPHIC on MSCI emerging index performance in 2020, see https://tmsnrt.rs/2OusNdX
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 Shreyashi Sanyal in Bengaluru; Editing by Shailesh Kuber)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.