Economic news

EM Stocks Break Three-Day Losing Streak, Turkish Lira Steady

Dec 1 (Reuters) - A gauge for emerging market stocks rose more than 1% on Wednesday as worries about the Omicron variant showed signs of ebbing, while Turkey's lira steadied following a tumultuous month.

The MSCI's index for developing world equities rose 1.3%, after clocking declines for November due to the detection of the new coronavirus variant, which caused widespread doubts about whether COVID-19 vaccines are effective against Omicron and fuelled fears that governments will reimpose restrictions on consumer and business activity.

Markets in Asia traded higher as traders took comfort in improving data, with South Korean exports growing at their fastest pace in three months in November.

Turkish stocks rose 2.2% to lead gains among peers in the Europe, Middle East and Africa region, after data showed factory activity grew in November, with new export orders and output rising. read more

A sharp increase in costs pushed output price rises to their fastest pace on record amid lira weakness, the survey also showed.

The lira rose 0.6% against the dollar, on track to break a three-day losing streak after clocking its worst month in twenty years. The currency had sunk to record lows in November as President Tayyip Erdogan pledged sharp rate cuts despite soaring inflation and widespread criticism.

"There is also evidence suggesting that the sharp real depreciation of the lira in recent years has strengthened the contribution of net exports to growth through, inter alia, promoting import substitution," said Citi economists Ilker Domac and Gultekin Isiklar.

"A repeat of this year, however, looks difficult against the backdrop of subdued consumer confidence, a sharp decline in purchasing power, soft labor market conditions and the elevated FX volatility."

The South African rand rose 0.4% for the third straight day, extending a recovery from last week's plunge on improving risk appetite, while Russia's rouble strengthened with oil prices as major producers prepared to discuss how to respond to the threat of a hit to fuel demand from the Omicron variant.

Poland's zloty rose 0.2% against the euro, leading gains among central and eastern European after data showed the manufacturing sector posted firmer growth in November than in the previous month.

Reporting by Shreyashi Sanyal in Bengaluru; Editing by Kim Coghill

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree