* Lira trades near record lows
* Chinese stocks rise, real estate sector gets some relief
* Russian rouble hit by new COVID variant, fresh curbs
Oct 21 (Reuters) - Most emerging market stocks and
currencies fell on Thursday as concerns over inflation dented
sentiment, with Turkey's lira leading losses amid uncertainty
over a central bank meeting later in the day.
MSCI's index of emerging market (EM) stocks fell
0.5%, while currencies lost 0.1%, as investors
stuck to safe havens on fears that growing inflation will stifle
South Africa's rand fell 0.6%, while most central
European currencies retreated against the euro.
Turkey's lira dropped 0.7% against the dollar and was
the worst performer in Europe, the Middle East, and Africa
(EMEA), as markets waited to see whether the central bank would
cut interest rates.
The lira has hit a string of record lows in recent sessions
after a major shake-up in central bank policy makers left
investors doubting the bank's independence from the government.
"It makes no difference whether the Turkish central bank
(TCMB) will lower the key rate by 50 or 100 basis points (bp)
today. Because a rate hike is what is really required but
certainly not a rate cut," Ulrich Leuchtmann, head of FX and
Commodity Research at Commerzbank, wrote in a note.
The central bank cut rates to 18% last month, despite
inflation reaching nearly 20% in Turkey. The cut was seen as an
extension of President Tayyip Erdogan's opposition to high
rates, which has seen him replace three central bank governors
in the past two years.
"As long as the TCMB does as it is told by the President,
monetary policy will reflect the President's mistaken views,"
Data from the Institute of International Finance showed that
foreign investors have been consistently pulling out of the
country since the rate cut last month.
Turkish stocks dipped 0.2%, as data showed
consumer confidence in October touched its lowest level since
Russia's rouble dropped 0.5% on reports of a new,
more contagious variant of COVID-19. President Vladmir Putin
approved a government proposal for a week-long workplace
shutdown at the start of November to combat a sharp rise in
COVID-19 cases and deaths.
A fall in oil prices also hurt the rouble, while Russian
stocks shed 0.2%.
In Asia, Chinese stocks closed higher, with the real estate
sector taking some support from indebted property developer
China Evergrande securing an extension on a defaulted
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
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see
(Reporting by Ambar Warrick
Editing by Mark Potter)