EMERGING MARKETS-Emerging stocks approach 4-week low; Turkey feels heat from politics
By Karin Strohecker LONDON, May 4 (Reuters) - Emerging equities sank to the lowest in almost four weeks and currencies also extended losses on signs of weakening global economic growth while Turkish assets suffered the fallout from rising political tensions. A raft of disappointing data from across the world has halted emerging assets' recent rally: Chinese data showing factory activity contracted for the 14th straight month, Indonesia's economy growing slower than expected and generally weak manufacturing activity across emerging markets. "The trend shows that main emerging markets remain in trouble from a macro point of view...we have economic activity hitting the brakes in China" said Cristina Maggio, head of EM strategy at TD Securities. "Markets remain somewhere in a limbo between what is going to happen later in the year with the (U.S. Federal Reserve), but it will be volatile between now and then." MSCI's emerging equity index lost 1 percent in its fourth straight session in the red. Russian dollar-stocks chalked up the biggest losses, tumbling 3.5 percent in their biggest daily fall since late February, playing catch-up following a long holiday weekend. Turkish stocks dropped 2 percent to six-week lows, adding to Tuesday's steep losses on signs of discord between President Tayyip Erdogan and Prime Minister Ahmet Davutoglu.. The lira fell half a percent to two-week lows. Erdogan is due to meet Davutoglu on Wednesday, bringing their usual weekly meeting forward by a day. "One of the major concerns for investors is that Mr. Davutoglu is perhaps seen as a more moderate and conciliatory figure within the government, in contrast to Mr. Erdogan's apparent increasing authoritarianism," said William Jackson at Capital Economics. Turkey's Coca Cola Icecek shares added to pressure on local equities, falling more than 8 percent after posting poor first quarter results. Elsewhere, South Africa's rand weakened 1.3 percent to 3-1/2 week lows and Kazakhstan's tenge almost matched that fall. However, PIMCO added its voice to the growing list of asset managers looking to raise exposure to emerging assets. PIMCO said it liked Russia's rouble, local bonds in South Africa, and both currency and peso-denominated debt in Mexico. "The landscape in emerging markets has been steadily improving over the last few months...With this in mind, we are beginning to redeploy capital to EM where we can find good value," PIMCO's head of asset allocation for EMEA Geraldine Sundstrom said in a note. Central and eastern European currencies were steady against the euro, but Hungary's forint weakened 0.3 percent on a renewed bout of selling of Hungarian government bonds after the central bank tempered expectations of further rate cuts. Polish stocks fell 1.2 percent while equities in Prague slipped 1 percent. For GRAPHIC on emerging market FX performance 2016, see http://link.reuters.com/jus35t For GRAPHIC on MSCI emerging index performance 2016, see http://link.reuters.com/weh36s For GRAPHIC on MSCI emerging Europe performance 2016, see http://link.reuters.com/jun28s For GRAPHIC on MSCI frontier index performance 2016, see http://link.reuters.com/zyh97s 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 813.16 -7.93 -0.97 +2.40 Czech Rep 888.66 -8.01 -0.89 -7.08 Poland 1877.11 -22.61 -1.19 +0.97 Hungary 26482.40 -56.76 -0.21 +10.71 Romania 6408.60 +2.68 +0.04 -8.51 Greece 592.37 +8.72 +1.49 -6.17 Russia 917.75 -33.36 -3.51 +21.23 South Africa 45218.10 -330.87 -0.73 -1.26 Turkey 79345.64 -1724.11 -2.13 +10.62 China 2991.10 -1.54 -0.05 -15.49 India 25102.83 -126.87 -0.50 -3.89 Currencies Latest Prev Local Local close currency currency % change % change in 2016 Czech Rep 27.02 27.02 +0.00 -0.09 Poland 4.40 4.39 -0.13 -3.23 Hungary 312.79 311.85 -0.30 +0.59 Romania 4.49 4.49 -0.03 +0.67 Serbia 122.52 122.50 -0.02 -0.86 Russia 66.37 66.42 +0.08 +9.92 Kazakhstan 332.06 327.30 -1.43 +2.54 Ukraine 25.13 25.00 -0.52 -4.69 South Africa 14.79 14.64 -1.07 +4.51 Kenya 100.60 100.60 -0.00 +1.59 Israel 3.77 3.78 +0.14 +3.07 Turkey 2.86 2.85 -0.37 +2.04 China 6.50 6.49 -0.13 -0.10 India 66.59 66.55 -0.06 -0.59 Brazil 3.56 3.56 +0.00 +11.27 Mexico 17.74 17.60 -0.77 -3.20 Debt Index Strip Spd Chg %Rtn Index Sov'gn Debt EMBIG 418 0 .06 7 16.38 1 (Reporting by Karin Strohecker)
