Nov 25 (Reuters) – Emerging market stocks fell on Friday on mounting concerns over economic growth, as less hawkish rhetoric from the U.S. Federal Reserve blunted the dollar and put an index of risky currencies on the upside. way for a weekly gain.
The MSCI Emerging Markets Equity Index fell 0.3% and is expected to end the week flat as most major exchanges in the Emerging Markets universe fell.
Bucking the trend, a rally in property stocks lifted mainland China indexes after sources said the central bank was set to offer cheap loans to financial firms for the purchase of bonds issued by real estate developers, the strongest political support yet for the sector affected by the crisis. .
Growing COVID-19 headwinds in China, which are hitting economic growth, and concerns about tighter monetary policy squeezing global GDP have weighed on risk sentiment this year.
However, the fact that the Fed is signaling that it may temper its pace of interest rate hikes has eased fears to some extent, leaving the safe-haven dollar on track for weekly losses and helping a currency index of emerging markets to recover most of last week’s declines.
Inflows into emerging markets stocks rose last week to more than $1.1 billion, from $734 million last week, according to JPMorgan data.
On Friday, most emerging market currencies were trading within a narrow range.
The Hungarian forint appreciated against the euro but remained down 1.5% over the week. Hungary expects to receive a total of around 7 billion euros in European Union funds next year from various EU programs, the government announced on Thursday.
“On EU funds, assurances from the Hungarian government are small – the European Commission (EC) blocks them…therefore official confirmation of a resolution must come from this source before it can act as a relief for the market,” Tatha Ghose said. , EM and FX analyst at Commerzbank.
The EC will likely approve Hungary’s post-pandemic recovery plan next week but could withhold any payments until Budapest meets all agreed conditions, sources said.
Malaysia’s ringgit rose 0.4% against the dollar to more than three-month highs as Anwar Ibrahim’s appointment as prime minister on Thursday ended days of stalemate following the elections in Malaysia. weekend.
In Ghana, dollar-denominated sovereign bonds fell 1.4 cents after Deputy Finance Minister John Kumah said the country was considering a “haircut” of up to 30% on its external debt . For 2022 Emerging Markets FX performance chart see http://tmsnrt.rs/2egbfVh For 2022 MSCI Emerging Market Index performance chart see https://tmsnrt.rs/2egbfVh
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(Reporting by Susan Mathew in Bengaluru; Editing by Shinjini Ganguli)