LONDON, May 13 (Reuters) - Emerging market assets fell on
Monday with Russian shares hit by falling oil prices and Asian
currencies sliding as the yen hit new lows against the dollar
following Group of Seven support for Japan's aggressive monetary
Analysts said the strength of the dollar was likely to
prompt investors to shift money away from emerging markets to
U.S. stocks, which hit record highs on Friday.
Disappointing Chinese industrial production data also
weighed on emerging markets while the prospect of more interest
rate cuts in developing economies affected trade, pushing down
the Polish zloty but lifting Turkish shares.
Shares in Pakistan also rose, reaching a fresh record
high after former Prime Minister Nawaz Sharif looked set to form
a government after winning Saturday's election..
MSCI's emerging equity benchmark slid 0.6 percent,
led by losses in Russia where shares fell 0.7 percent at
one point on lower oil prices, the country's chief export.
Speculation the U.S. Federal Reserve may be preparing to
wind down its stimulus is boosting the dollar and hitting
emerging assets which have benefited from the extra liquidity
provided by the U.S. central bank. A stronger dollar also means
many countries have to pay more for oil, which is denominated in
'It looks like a dollar-bid environment which is not
fantastic for emerging markets,' said Luis Costa, head of CEEMEA
debt and FX strategy at Citi.
'The main variable here which is driving everything else is
U.S. stocks. It is still this rotation from high-dividend paying
stocks into cyclical stocks, growth stocks in the U.S.'
The South Korean won hit a three-week low, leading
weakness among emerging Asian currencies, as the yen slumped to
a 4-1/2 year low against the dollar after Japan's monetary
stimulus plan was endorsed by G7 members.
Weaker-than-forecast Chinese industrial output was another
dampener and the Shanghai share index traded 0.2 percent
Commodity exporter South Africa was also under pressure,
with the rand down 0.4 percent and bond yields up around
6 basis points as fresh mining strikes threatened.
Shares in oil-importer Turkey rose however, ahead
of an expected interest rate cut on Thursday and benefiting from
better-than-expected data on the current account
(Reporting by Philip Baillie; Editing by Susan Fenton)
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Keywords: MARKETS EMERGING
(Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg on year Morgan Stanley Emrg Mkt Indx 1043.76 -6.98 -0.66 -1.08 Czech Rep 964.38 -1.71 -0.18 -7.16 Poland 2340.16 +2.00 +0.09 -9.40 Hungary 18515.90 +12.83 +0.07 +1.89 Romania 5286.51 -8.38 -0.16 +2.66 Russia 1427.69 -2.09 -0.15 -9.42 South Africa 35570.96 -8.86 -0.02 +2.23 Turkey 90027.68 +458.79 +0.51 +15.11 China 2241.92 -4.91 -0.22 -1.20 India 19764.75 -357.57 -1.78 +1.74 Currencies Latest Prev Local Local close currency currency % change % change in 2013 Czech Rep 25)
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