Emerging stocks hit a 20-month high on Tuesday, lifted by a global tech stock rally and easing geopolitical concerns, while the main emerging currencies gained against a steady dollar, shrugging off a batch of mixed data.
MSCI's emerging market index rose 0.7 percent to its strongest since June 2016 reflecting gains in heavyweights South Korea and Taiwan, where a number of blue chip tech stocks such as Samsung Electronics and Taiwan Semiconductor Manufacturing Co soared.
The gains came in the wake of strong earnings from Google, Amazon and Microsoft last week and against a slight easing in tensions over the Korean peninsula as U.S. President Donald Trump opened the door to meeting North Korea's Kim Jong Un.
Markets shrugged off data showing that China's factory sector lost momentum in April, with growth slowing to its weakest pace in seven months, as domestic and export demand faltered and commodity prices fell.
U.S. factory activity also slowed in April.
"You've seen some disappointing figures coming out of the U.S. and China," said Per Hammarlund, chief emerging markets strategist at SEB.
"It was unreasonable to expect that the relatively high numbers we saw in March, when PMI numbers have been running well ahead of actual growth numbers," could be repeated, he said.
Currencies also recorded a strong session with the dollar treading water as many markets re-opened after a long holiday weekend.
South Africa's rand snapped a five-day losing streak to strengthen 1 percent against the dollar.
The gains came after President Jacob Zuma, leader of the ruling ANC party, made a hasty exit from a May Day rally organised by labour federation Cosatu on Monday. The crowd of workers became rowdy, with some booing and chanting slogans against him.
"Zuma still has the support within the ANC – not among all ANC members, but within the decision-making body in the ANC. He has enough allies within that body to keep him in power until the next presidential election," said SEB's Hammarlund.
Turkey's lira gained 0.6 percent, while Mexico's peso extended its gains for a fourth straight session, strengthening 0.2 percent as investors saw the threat of protectionist measures from the U.S. administration recede.
However, emerging European currencies slightly eased against the euro across the board despite manufacturing data that was in line, or a touch stronger than expected.
Data from the Institute of International Finance (IIF) confirmed investors' appetite for riskier assets, showing that emerging markets had recorded a fifth straight month of net 'non-resident' portfolio inflows in April, their best run since the first half of 2015.
Inflows topped $20 billion for the third month running in April, making it the strongest three-month streak since 2014, helped by record dollar-denominated emerging market debt issuance.
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
Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg
on year
Morgan Stanley Emrg Mkt Indx 986.35 +6.59 +0.67 +14.39
Czech Rep 1004.19 -3.68 -0.37 +8.96
Poland 2394.89 +18.02 +0.76 +22.95
Hungary 33074.27 +117.97 +0.36 +3.35
Romania 8236.78 +6.32 +0.08 +16.26
Greece 727.36 +15.19 +2.13 +13.01
Russia 1127.16 +12.73 +1.14 -2.18
South Africa 47156.56 +84.83 +0.18 +7.41
Turkey 95199.87 +544.56 +0.58 +21.83
China 3143.71 -10.95 -0.35 +1.29
India 29925.46 +7.06 +0.02 +12.39
Currencies Latest Prev Local Local
close currency currency
% change % change
in 2017
Czech Rep 26.89 26.87 -0.10 +0.42
Poland 4.22 4.22 -0.05 +4.36
Hungary 312.03 311.72 -0.10 -1.03
Romania 4.54 4.53 -0.18 -0.16
Serbia 123.02 122.96 -0.05 +0.27
Russia 56.92 56.96 +0.08 +7.64
Kazakhstan 315.21 315.48 +0.09 +5.85
Ukraine 26.54 26.54 +0.00 +1.75
South Africa 13.29 13.41 +0.90 +3.35
Kenya 103.00 103.10 +0.10 -0.61
Israel 3.61 3.61 +0.09 +6.70
Turkey 3.53 3.55 +0.55 -0.19
China 6.89 6.89 -0.06 +0.71
India 64.16 64.24 +0.12 +5.90
Brazil 3.17 3.18 +0.03 +2.47
Mexico 18.70 18.74 +0.19 +10.77
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 316 -2 .07 7 80.79 1
All data taken from Reuters at 08:44 GMT. Currency percent change calculated from the daily U.S. close at 2130 GMT.
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see)
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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