EMERGING MARKETS-Lira Extends Gains; Regulatory concerns hit Chinese internet stocks
Band Susan Mathew
October 27 (Reuters) – Emerging market stocks fell 0.8% on Wednesday as Chinese internet and gaming companies sank, while the Turkish lira prolonged a rally of relief even as tensions with the West persisted.
Most other emerging currencies slipped, under pressure from rising US Treasury yields. Asian currencies remained stable at lower, while the fall in oil prices saw the Russian ruble RUB = snap three days of gains, down 0.4%. the South African rand ZAR = fell 0.7% to a two-week low. WE/
Read it TRY = rose 0.7% to 9.47 per dollar, moving further away from the nearly 10 level reached on Monday when President Tayyip Erdogan said he ordered the expulsion of ambassadors from the United States and nine other countries westerners.
A de-escalation of tensions since then has helped the lecture to recover. But Ankara’s purchase of NATO-incompatible Russian defense systems has further fueled tension, with U.S. lawmakers urging President Joe Biden’s administration not to sell F-16 fighter jets to Turkey.
Any respite to read it will be temporary, also given the country’s uncertain and unconventional monetary policy, said Cristian Maggio, head of portfolio strategy at TD Securities. “Our forecast is 9.15 in Q4 and 9.75 in Q1 2022.”
Commerzbank, meanwhile, revised its March 2022 forecast for the lira / dollar pair to 11.00 from 10.00.
Data on Wednesday showed Turkey’s foreign trade deficit narrowed by 47.5 percent year-on-year in September, but the country’s economic confidence index fell 1 percent month-on-month in October.
Emerging market equities .MSCIEF were ready for their worst session in two weeks as a weighty Chinese blue chip .CSI300 and Hong Kong stocks .HSI fell well above 1%.
Internet and gaming companies such as Tencent 0700.HK, NetEase 9999.HK, Baidu 9888.HK and Meituan 3690.HK slipped between 1.7% and 5% as Beijing stepped up oversight of internet companies, which it criticized for issues ranging from violating consumer rights to food addiction to young people.
Amid concerns about slowing growth in China, profits for Chinese electric utilities in the first three quarters of 2021 plunged as companies were constrained by soaring coal costs that they could not. pass on to consumers.
But, on a monthly basis, profits of Chinese industrial companies rose at a faster pace in September.
Concerns around China Evergrande Group 3333.HK persisted with the cash-strapped real estate developer’s next payment deadline coming Friday.
Late Tuesday, China’s National Development and Reform Commission said it and the State Foreign Exchange Administration had met with foreign debt issuers, advising them to use the funds for approved purposes. and “jointly maintain their own reputation and the general order of the market”. .
For the CHART on emerging market foreign exchange performance in 2021, see http://tmsnrt.rs/2egbfVh
For the CHART on the performance of the emerging MSCI index in 2021, see https://tmsnrt.rs/2OusNdX
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For the CENTRAL EUROPE market report, see EEC /
For the TURKISH market report, see .IS
For the report on the RUSSIAN market, see RU / RUB
(Reporting by Susan Mathew in Bangalore; Editing by Subhranshu Sahu)
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