Oct 3 (Reuters) - Emerging market stocks hit 2-1/2-year
lows on the first day of the last quarter of the year, as grim
manufacturing output globally worsened growth outlook, while
Turkey's lira hit record lows on Monday after inflation climbed
to a new 24-year high.
Asian stocks slipped 0.9%, with trading
thinned by market holidays in China and South Korea. Central
European and South African stocks also
fell, while some bourses rose, with Turkey shares
Sentiment remained weak as factory activity data from around
the globe showed continued weakness on slowing demand in China
and advanced economies amid cost pressures.
An index of emerging market stocks fell 0.9%,
while the currencies counterpart lost 0.4%.
"We expect conditions to remain subdued, as weaker global
demand, high inflation and tighter monetary policy continue to
drag on manufacturing activity," said Gareth Leather, seniore
Asia economist at Capital Economics.
Emerging markets have had a tough year due to recession
worries stemming from central banks undertaking aggressive
monetary tightening to tame surging inflation. The EM stocks
index is down almost 30% so far in 2022, on track for its worst
yearly decline since the global financial crisis of 2008.
Turkey's lira hit a record low of 18.56
after data showed annual inflation in September rose to 83.45%,
although less than the 84.63% that was expected.
Despite a runaway inflation, Turkey's central bank delivered
two rate cuts this year, with the subsequent slide in the lira
contributing further to rising prices.
Capital controls, in place since December, have slowed the
lira's slide but with the government's demand for stimulus, the
outlook for a recovery looks bleak. The currency is down about
28% so far this year.
Indonesia's rupiah was among the biggest decliners in
Asia, down 0.5% after annual inflation in September accelerated
to its highest since October 2015 at 5.95%.
Russia outperformed after data showed manufacturing activity
grew at its fastest rate in 3-1/2 years in September, driven by
rises in production, new orders and client demand. Western
sanctions, however, continued to weigh on exports.
Investors will be watching Brazil markets after first round
presidential elections on Sunday showed far-right President Jair
Bolsonaro outperformed polling and prevented leftist former
President Luiz Inacio Lula da Silva from gaining an outright
victory. This may lift markets, analysts said, as voters go to
the polls again on Oct. 30.
For GRAPHIC on emerging market FX performance in 2022, see http://tmsnrt.rs/2egbfVh
For GRAPHIC on MSCI emerging index performance in 2022, see https://tmsnrt.rs/2OusNdX
For TOP NEWS across emerging markets
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see
(Reporting by Susan Mathew in Bengaluru; editing by Uttaresh.V)