BR: Emerging stocks cheer as China shares hit 7-year highs
LONDON: Emerging market shares started the week by rising almost 1 percent on Monday, buoyed by Chinese stocks at 7-year highs, though currencies suffered at the hands of a recovering dollar and lower oil prices.
MSCI's emerging equity index rose 0.8 percent, lifted by China stocks jumping almost 3 percent on hopes that more infrastructure spending and policy stimulus will re-energise a cooling economy and boost profits.
"China' stocks surged to yet another year-to-date high on the back of market expectations that the PBoC might provide even more monetary policy stimulus with Governor Xiaochuan saying that 'China can have room to act'," said Rabobank strategist Piotr Matys.
Markets across eastern Europe joined the rally, with Polish and Hungarian indices adding around 1 percent, while in Russia both rouble- and dollar-denominated shares rose.
However the Athens stock index fell 1.38 percent on concerns that reforms proposed by Athens to unlock much-needed bailout cash were seen by creditors as a collection of ideas rather than something that could be presented to the Eurogroup.
And lower oil prices dampened Middle Eastern stock markets, with Kuwait down almost 1 percent .
While eastern European currencies traded flat to slightly positive against the euro, many emerging major currencies eased against the dollar.
South Africa's rand and bond prices weakened after a statement by U.S. Federal Reserve Chair Janet Yellen on Friday, signaling the bank was on course to raise interest rates, lending a helping hand to the dollar-index.
Meanwhile, Turkey's lira eased ahead of the release of fourth quarter gross domestic product data on Tuesday, expected to have gained 2 percent year-on-year..
Nigerian stocks were flat at two-week highs as investors awaited the outcome of a closely fought presidential election that was marred by confusion and sporadic violence. Results are expected to soon start trickling in.
Earlier on Monday, Fitch confirmed its BB- rating on Nigeria, but cut its outlook for Africa's top oil producer to negative, citing political uncertainty and eroded fiscal buffers in a lower oil price environment.
