HK shares surge almost 6%; HSBA, Tencent rally
Hungary's forint slips again, approaches record low
Polish, Romanian cenbank decisions due later in day
S.African cenbank says power cuts to hamper growth
Oct 5 (Reuters) - Emerging market shares jumped 2% on
Wednesday, thanks to a surge in Hong Kong stocks, while
currencies were muted as the dollar attempted to claw back some
Hong Kong shares jumped 5.9%, with HSBC shares
rallying 5.7% after the bank said it was considering
selling its business in Canada, worth billions of dollars.
Internet and tech heavyweights such as Tencent,
Alibaba and Meituan jumped between 5.6% and
Elsewhere, Turkish shares rose 0.5%, extending
gains to a fourth session. The benchmark index has rallied more
than 10% since Friday.
Most other bourses in emerging Europe, the Middle East and
Africa lost ground. Optimism from a strong overnight close on
Wall Street appeared to have faded as Western European bourses
and U.S. stock futures fell.
MSCI's index of EM shares had rallied 2% on
Tuesday as well, after weak U.S. manufacturing data spurred bets
that the Federal Reserve could be forced to tone down its
aggressive tightening stance. Eyes will now be on Friday's U.S.
labour market report.
But keeping investors nervous, San Fransisco Fed President
Mary Daly called for more hikes and sustained restrictive
policies till inflation comes down to the Fed's 2% target.
"We remain sceptical that the Fed is about to pivot on the
back of slightly softer U.S. data this week," ING strategists
As major central banks tighten policies aggressively to curb
inflation, recession fears have emerged, sapping risk appetite.
The EM stocks index has declined more than 25% so far this year,
while its currencies counterpart is down 7.7%.
Hungary's forint dropped 0.6%, approaching its
all-time low as the Russia-Ukraine war hampers gas flows,
raising worries about energy supply and surging costs.
Hungary's central bank will offer 1 trillion forints ($2.38
billion) worth of new short-term discount bills in a tender on
Thursday, as it aims to drain forint liquidity from the market
in line with an announcement made last month.
Romania's leu and Poland's zloty made
small moves against the euro ahead of central bank decisions
later in the day.
Romania's interest rate was seen rising by 50 basis points
to 6%, while Poland is expected to raise by 25 basis points to
7.00% amid rising inflation.
In Poland, the market is still tilted to the hawkish side as
inflation is yet to peak, ING said. But as the central bank
tries to end the hiking cycle, Wednesday's meeting will be
negative for the zloty, they said.
South Africa's rand lost 0.6% against the dollar
after rallying nearly 3% over the last two sessions.
The country's central bank on Tuesday said it estimated
scheduled power cuts implemented by struggling utility Eskom
would shave about 1.0 percentage point from 2022 economic
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 Subhranshu