* HK stocks jump 3.3%
* Turkey cenbank seen keeping rate unchanged at 14%
* Russian rouble slips after 1.2% surge on Wed
Jan 20 (Reuters) - Emerging market stocks snapped a five-day
losing streak on Thursday, with Hong Kong shares surging 3.3%,
as investors welcomed more monetary policy easing from China,
while Turkey's lira slipped ahead of a central bank meeting
later in the day.
U.S. Treasury yields coming off this week's peaks also aided
risk sentiment, sending MSCI's index of EM shares up
1% after losing 2% over the last five sessions amid rising bets
for a hawkish Federal Reserve.
China cut its one-year loan prime rate by 10 basis points
(bps) to and the five-year LPR by 5 bps, the first reduction
since April 2020. Investors had bet on more easing after recent
data had shown slowing economic growth.
With heavyweights such as Tencent, Meituan
and Alibaba surging between 11% and 6.9%,
Hong Kong's main index marked its best session in nearly
six months. Struggling property stocks also rallied after
Beijing's measures to increase access to liquidity.
"Policy-divergence may eventually undermine the (Chinese
yuan) but policy supports are positive for domestic securities
(such as bonds and equities) especially after a year of
regulatory tightening," Maybank strategists said in a note.
"Expectations for portfolio-related inflows may continue to
support the (yuan)."
The yuan was just hair's breadth away from over 3-1/2
year highs against the dollar.
Turkey's lira lost 0.8%, while stocks rose
0.7% ahead of the central bank's decision due at 1100 GMT. The
policy rate is seen unchanged at 14% after 500 bps worth of cuts
amid surging inflation sent the currency spiralling to record
lows of over 18 a dollar.
Turkey's monetary policy committee will likely remain on
hold this quarter, Credit Suisse analyst Berna Bayazitoglu said.
Turkey's decision would follow those of Malaysia and
Indonesia which left their respective rates unchanged, while Sri
Lanka's was raised by 50 bps.
In geopolitical news, U.S. President Joe Biden said Russia
would pay dearly for a full-scale invasion but suggesting there
could be a lower cost for a "minor incursion," sowing doubts
about Western response to an attack.
Russia's rouble slipped 0.6% after surging 1.2% on
Wednesday, while Ukraine's hryvnia moved further away
from December 2020 lows. Ukraine's central bank is seen hiking
the key rate by 50 bps later in the day.
Biden and his team have prepared a broad set of sanctions
and other economic penalties to impose on Russia in the event of
an invasion and the U.S. president said Russian companies could
lose the ability to use the dollar.
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 Susan Mathew in Bengaluru; Editing by Rashmi