By Carolyn Cohn
LONDON, Sept 23 (Reuters) - Emerging stocks edged up on
Monday following strong Chinese manufacturing data, but
Ukrainian debt insurance costs rose after a rating downgrade
late last week.
Chinese data boosted emerging assets after they lost ground
on Friday on speculation the Federal Reserve would start to cut
its money-printing programme as early as October, after it held
steady this month.
But emerging markets have generally reacted positively to
the postponement of the stimulus withdrawal.
'The markets are definitely working on an assumption of Fed
delay to tapering - that brings investors a moment of relief,'
said Luis Costa, head of CEEMEA debt and FX strategy at Citi.
'However, the bearish case doesn't collapse entirely, we are
in the middle of a bigger bearish cycle for (emerging market)
rates and FX.'
The MSCI emerging equities index rose 0.3 percent
towards recent 3-1/2 month highs and has rallied 9 percent this
month. But the index remains in the red for the year.
Chinese shares rose more than 1 percent
after a two-day break, following China's flash HSBC PMI survey
for manufacturing, which climbed to 51.2 in September from 50.1
Indian stocks fell 2 percent, however, extending
Friday's losses after a surprise rate hike.
Emerging European currencies were steady to weaker and
emerging sovereign debt spreads widened 2 basis points
to 326 bps over U.S. Treasuries.
Ukraine's debt spreads widened by 12 basis points to 796 bps
over U.S. Treasuries and five-year credit default swaps rose 12
bps to three-month highs of 900 bps, according to Markit, after
Moody's cut Ukraine's rating late on Friday, to Caa1 with review
for further downgrade.
'Ukraine is now in the basket of credits, including Egypt,
Pakistan, Cyprus, Jamaica, Belize, Ecuador, and Cuba ... that
either have or are on the brink of restructuring,' said Tim Ash,
emerging markets strategist at Standard Bank, in a client note.
The Kenyan shilling held steady within recent ranges
as investors traded cautiously after a weekend attack by
Islamist militants on a shopping mall in Nairobi.
The Croatian kuna hit 5-1/2 month lows after Fitch
cut the country's credit rating to junk on Friday.
Israel's shekel dipped 0.2 percent, retreating from
recent two-year highs ahead of a rate decision on Monday which
is expected to result in unchanged rates of 1.25 percent.
(For GRAPHIC on MSCI emerging index performance 2013, see http://link.reuters.com/weh36s
For GRAPHIC on MSCI emerging Europe performance 2013, see http://link.reuters.com/jun28s
For GRAPHIC on MSCI frontier index performance 2013, see http://link.reuters.com/zyh97s
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see)
(Additional reporting by Sujata Rao; Editing by Catherine
firstname.lastname@example.org)(+44 207 542 6320))
Keywords: MARKETS EMERGING
(Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg on year Morgan Stanley Emrg Mkt Indx 1012.42 -0.75 -0.07 -4.05 Czech Rep 956.78 +5.02 +0.53 -7.89 Poland 2402.95 -5.21 -0.22 -6.97 Hungary 18184.26 -61.65 -0.34 +0.06 Romania 5880.99 +15.27 +0.26 +14.20 Russia 1447.77 -15.15 -1.04 -8.14 South Africa 39458.43 -83.77 -0.21 +13.40 Turkey 77228.91 -634.02 -0.81 -1.25 China 2221.04 +29.19 +1.33 -2.12 India 19921.18 -342.53 -1.69 +2.55 Currencies Latest Prev Local Local close currency currency )
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