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EMERGING MARKETS-Shares begin September on upbeat note; dour PMIs cap gains

reuters.com · 09/01/2021 04:29
EMERGING MARKETS-Shares begin September on upbeat note; dour PMIs cap gains

Asian, Russian manufacturing PMIs fall

Turkey GDP grows 21.7% in Q2

Indian shares hit all-time highs

By Susan Mathew

- Emerging market shares rose for a fourth straight session on Wednesday as heavyweight Chinese companies made healthy gains, although waning optimism about global economic growth kept sentiment in check.

Dour manufacturing PMIs from most of Asia as well as Russia on weak demand and supply disruptions from coronavirus restrictions worried investors about the ability to tide over a pandemic induced slump. nL1N2Q3065 nZRN002P9H

The Chinese yuan CNY= slipped slightly as did most other Asian units. Russia's rouble RUB=, however, hit two-week peak, aided by rising oil prices. The greenback edged higher but stayed close to three-week lows. FRX/ O/R CNY/

"More signs of growth jitters could be weighing a tad on regional FX sentiments, but given potential easing of production drags from re-opening in various (Asian) economies, the extent of dampening in confidence could be contained," Maybank strategists said.

Meanwhile, Turkey's lira TRY= firmed 0.3% against the dollar after data showed the economy grew a massive 21.7% year-on-year in the second quarter, while PMIs showed factory activity grew in August. nL8N2Q31FJ

In Poland, manufacturing grew but at a slower pace. The Polish zloty EURPLN= stayed close to eight week highs against the euro. nZRN002P9SnZRN002P9T

MSCI's index of EM currencies .MIEM00000CUS was flat around more than two-month highs, while its stocks counterpart .MSCIEF rose 0.1% after posting its best month since January.

The PMIs, combined with sluggish rise in new home prices in China, raised expectations of easing monetary policy there, and sent Chinese blue-chips .CSI300 up 1.3% after two days of losses. .SS

"While there is some room for the fiscal and monetary policy to catch up a bit to ease the slowdown pains (in China), the economic policy alone is insufficient to help turn around the economy," warned Commerzbank Senior Economist Hao Zhou.

Turkey shares .XU100 hit over five-month highs, while Russia's MOEX narrowed its gap to record highs to 0.4%.

Middle East .TASI, .DGFMGI and African stocks .JTOPI were flat to lower. The chief executive of beleaguered state-owned utility Eskom warned that coal power generation could see South Africa face "another era of isolation". nL8N2Q24JU

Indian shares .BSESN, .NSEI steadied after hitting all-time highs, propelled by data showing the economy grew more than 20% in the April-June quarter. .BO

Overnight, Chile's central bank doubled the benchmark interest rate to 1.5%, topping expectations. The currency underperformed its Latin American peers last month primarily due to volatility in metal markets on concerns over local copper supply. nL1N2Q233X

For GRAPHIC on emerging market FX performance in 2021, see http://tmsnrt.rs/2egbfVh

For GRAPHIC on MSCI emerging index performance in 2021, see https://tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets nTOPEMRG

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB

Turkish GDP stages powerful rebound in Q2https://tmsnrt.rs/38v3zYK

(Reporting by Susan Mathew in Bengaluru; editing by Uttaresh.V)

((susan.mathew@thomsonreuters.com; +91-80-6287-2704;))