Emerging market equities hovered near two-week highs on Tuesday, underpinned by rising oil prices, solid Chinese industrial profits and a flat dollar, which also allowed the rand and the lira to firm.
Gains were capped however as investors waited to see if U.S. Federal Reserve chair Janet Yellen would restate the case for a third 2017 interest rate rise when she speaks in London later.
Weak U.S. durable goods orders have raised concerns about tepid growth and slowing inflation, pushing long-dated U.S. Treasury yields to seven-month lows on Monday. The dollar retreated 0.4 percent against a basket of currencies.
MSCI's benchmark emerging stocks index was steady, with a weak opening in emerging Europe offsetting a stronger performance in Asia. Index heavyweight South Korea hit a record high, buoyed by expectations of a strong second quarter.
Chinese mainland stocks also rose 0.2 percent to an 18-month high after industrial profits surged 16.7 percent in May year-on-year.
"China was important but oil has stabilised and that is tempting people to get back into the EM trade," said Per Hammarlund, chief emerging markets strategist at SEB. "The mood has changed a little bit, and to a large extent it is driven by commodities and oil in particular."
Oil prices rose 1.2 percent to trade above $46 a barrel, after recent falls. The Kazakh tenge was one of the main beneficiaries of the rebound, firming 0.7 percent against the dollar.
The weaker dollar also allowed the South African rand and the Turkish lira to make modest gains, firming around 0.1-0.2 percent.
The rand has steadied after volatile trading last week. Markets were rattled by a call from an anti-graft watchdog for South Africa's central bank to change its mandate, accusing it of pursuing commercial interests.
Investors' nerves were already frayed over revisions to the country's mining charter.
Hammarlund said he expected more populist initiatives in the run up to the ruling African National Congress' party conference in December. "That's a big political risk for the rand," he said.
The Russian rouble remained on the backfoot, slipping 0.2 percent, and shares in Russian business conglomerate Sistema slumped as much as 17 percent in early trade after a Russian court "arrested" some of its assets as part of a legal dispute with Rosneft.
The diplomatic crisis between Qatar and its Arab neighbours rumbled on, with Bahrain accusing Qatar of military escalation while Germany labelled a 13-point ultimatum issued to Qatar "very provocative".
Overnight Brazil's top federal prosecutor charged President Michel Temer with taking multi-million dollar bribes but the real was steady in early trade.
"It's mostly priced in already, but the fact that he will likely survive this is negative for the real," said Hammarlund.
For GRAPHIC on emerging market FX performance 2017, see http://tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2017, see http://tmsnrt.rs/2dZbdP5
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see)
Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg
on year
Morgan Stanley Emrg Mkt Indx 1019.32 +0.21 +0.02 +18.21
Czech Rep 974.35 +2.97 +0.31 +5.72
Poland 2335.92 -1.77 -0.08 +19.92
Hungary 35569.34 -169.77 -0.48 +11.14
Romania 8158.64 -78.94 -0.96 +15.15
Greece 818.07 -1.02 -0.12 +27.10
Russia 993.96 +1.12 +0.11 -13.74
South Africa 45242.21 +129.00 +0.29 +3.05
Turkey 99638.65 -433.50 -0.43 +27.52
China 3191.51 +6.07 +0.19 +2.83
India 30913.62 -224.59 -0.72 +16.10
Currencies Latest Prev Local Local
close currency currency
% change % change
in 2017
Czech Rep 26.26 26.30 +0.14 +2.83
Poland 4.21 4.20 -0.17 +4.62
Hungary 309.06 308.95 -0.04 -0.08
Romania 4.56 4.57 +0.27 -0.58
Serbia 121.29 121.36 +0.06 +1.70
Russia 58.89 58.79 -0.18 +4.03
Kazakhstan 322.40 324.80 +0.74 +3.49
Ukraine 26.08 26.05 -0.12 +3.53
South Africa 12.84 12.86 +0.12 +6.93
Kenya 103.55 103.60 +0.05 -1.14
Israel 3.51 3.52 +0.20 +9.58
Turkey 3.49 3.50 +0.17 +0.94
China 6.81 6.84 +0.40 +1.94
India 64.44 64.43 -0.01 +5.45
Brazil 3.30 3.30 +0.01 -1.29
Mexico 17.83 17.86 +0.20 +16.19
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 329 -1 .05 7 90.06 1
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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