Inside a Securities Brokerage Ahead of China†A Shares' Debut on the†MSCI
NEW DELHI: Most emerging markets stocks and currencies had a tepid start to a week filled with inflation reports from top developing economies, while investors awaited Israel’s interest rate decision later in the day.
MSCI’s emerging markets equity index, and an index tracking currencies inched up 0.1% each yesterday morning.
Focus is on consumer inflation reports for June out of top emerging markets economies including China, India, the Czech Republic, Romania, Hungary and Russia.
The MSCI equities index has risen over 8% so far into the year as some central banks started cutting rates. However, concerns of price pressures flaring up have cropped up recently.
Main equity indexes in China ended lower by 0.9%, each at a four-month low, and Hong-Kong stocks lost 1.5%. Investors awaited the Communist Party’s Third Plenum later in the month, that is expected to focus on greater reforms to aid the country’s limping economy.
“The market anticipates the session to conclude with a stimulus package powerful enough to lift China’s economy out of secular slowdown,” Jinyue Dong and Le Xia, economists at BBVA Research said.
“The authorities are likely to extend the olive branch to private enterprises and foreign capital to anchor their expectations.”
Separately, the People’s Bank of China said it would start conducting temporary bond repurchase agreements to make open market operations more efficient and keep banking system liquidity ample. Yields on the country’s sovereign bonds across the board inched up between one and three basis points.
Meanwhile, Taiwanese stocks rose 1.3% to hit a record closing high, underpinned by a surge in technology-related stocks, with TSMC, the world’s largest contract chipmaker also notching an all-time high. — Reuters
