Tuesday, Jun 2, 2015Tuesday, Jun 2, 2015

Emerging currencies, stocks rise, shrugging off Russia tensions

Published on Apr 8, 2014 5:15 PM

LONDON (Reuters) - Emerging market currencies and stocks hit multi-month highs on Tuesday, shrugging off an escalation in tensions between Russia and Ukraine thanks to a renewed interest in high-yielding carry trades and expectations of stimulus from China.

Russian stocks fell to 10-day lows but even the rouble rallied almost half a percent as investors flocked to a range of emerging assets from sovereign dollar bonds to formerly shunned currencies from the 'Fragile Five' countries - Brazil, Indonesia, India, Turkey and South Africa.

MSCI's emerging equity index rose half a per cent to nearly four-month highs, thanks to a 2.2 per cent gain in shares in China, where investors are increasingly pricing in some form of stimulus to boost flagging economic growth.

The emerging index was up for the third straight day despite steep falls on Wall Street, where the Nasdaq has suffered its worst three-session fall since November 2011, and potentially destabilising events in eastern Ukraine.

Enjoy 2 weeks of unlimited digital access to The Straits Times. Get your free access now!