Stocks, FX set for worst quarter since 2020



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EM stocks up 0.2%, currencies gain 0.7%

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Lira on track for eighth monthly decline

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Russian rouble, stocks gain

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South Africa rand firmer ahead of trade data

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India hikes rates by 50 bps, analysts see more tightening

By Bansari Mayur Kamdar

Sept 30 (Reuters) - Stocks and currencies in emerging markets were set for their worst quarterly performance since 2020, despite ticking up on Friday, as a strong dollar wreaked havoc and investors worried about a global economic slowdown.

MSCI's emerging market stocks index .MSCIEF rose 0.2% by 0843 GMT, but was heading for a fifth straight quarter of losses for the first time since it was launched in the late 1980s.

The emerging market currencies index .MIEM00000CUS gained 0.7%, but was down 4.5% for the quarter and 8.2% this year.

Last week saw the largest retail hard currency bond fund outflows from emerging markets since peak concerns about coronavirus in March 2020, according to a JP Morgan note.

"The big driver here is obviously the global recession risk and a much more hawkish Federal Reserve. You have the safe haven attribute and the U.S. interest rate differential attribute very much alive in the EM markets," Simon Harvey, head of currency analysis at Monex Europe, said.

"We're getting to this point in EM where we're seeing some push back, particularly in the Asian markets, against this stronger dollar narrative."

The Chinese yuan firmed against the dollar after a report that the country's major state banks were told to stock up the yuan to stem its descent against the greenback.

South Africa's rand ZAR= also firmed 0.6% against the dollar ahead of trade and budget balance data.

Turkey's lira TRY= hovered near its historic low against the dollar, while its BIST 100 share index .XU100 ticked 0.2% higher.

The Hungarian forint EURHUF= edged up 0.2% against the euro a day after hitting a record low, while other central and eastern European currencies were mixed in early trading.

Data showed Hungary's industrial producer price inflation hit an annual 43.4% in August, from 37.9% in July. .

Russian stocks opened higher as President Vladimir Putin was set to proclaim the annexation of four Ukrainian regions, marking a new escalation in Moscow's conflict with Kyiv, while the rouble strengthened past 57 to the dollar.

In Asia, the Indian rupee held its gains against the dollar after the Reserve Bank of India raised its benchmark repo rate by 50 basis points.

South Korean President Yoon Suk-yeol called for more urgency in dealing with turbulent markets as the won currency's KRW= fall to a 13-1/2-year low heightened fears of capital flight.

For GRAPHIC on emerging market FX performance in 2022, see Link For GRAPHIC on MSCI emerging index performance in 2022, see Link

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see



EM policy rate moves Link



Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by
Alexander Smith


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