BENGALURU, India, 27th June, 2024 (WAM) -- Risk sentiment was fragile in emerging markets on Thursday after lacklustre data out of China and ahead of the Czech Republic and Turkey's monetary policy decisions, while the rand weakened to a two-week low as key cabinet appointments in South Africa loomed.
Reuters reported that MSCI's index tracking equities in the developing world lost 0.4 percent, with heavy-weight China's blue-chip index and the Shanghai Composite Index dropping 0.7 percent and 0.9 percent, respectively, after data showed industrial profits in the world's top consumer rose at a sharply slower pace in May.
Forex
A currency-tracking index was flat as investors awaited monetary policy decisions from the central banks of Turkey and the Czech Republic.
The koruna slipped 0.1 percent against the euro, with markets bracing for a smaller 25 basis point (bps) rate cut to 5 percent, with inflation drawing closer to the central bank's 2 percent target.
The lira traded near record lows at 32.89 to the dollar with expectations that interest rates will be left on hold at 50 percent. After years of rate cuts that saw the currency plummet, the country shifted to a more orthodox policy last year.
In South Africa, the rand slipped 1 percent, and yield on the benchmark bond rose over 15 bps as markets continued to wait for the cabinet unveiling of the country's first coalition government.
Kenya's shilling dipped 0.6 percent. Rating agency Moody's said President William Ruto's decision to withdraw planned tax hikes would complicate the disbursement of future International Monetary Fund funding.
Markets await US presidential debate
In South Asia, India's benchmark bond was flat, but the rupee inched up 0.14 percent, among indicators that foreigners were buying the country's sovereign debt ahead of its inclusion in JPMorgan's emerging markets debt index on Friday.
Elsewhere, Zambia's kwacha inched up 0.2 percent in thin trade after the International Monetary Fund (IMF) said it approved a disbursement of some US$569.6 million following a review, and increased its loan to US$1.7 billion from US$1.3 billion.
Bolivia's currency was largely unchanged after a military assault on the presidential palace was stopped late on Wednesday.
Later in the day, markets will also parse comments from U.S. presidential candidates during their first debate ahead of the November elections, to assess their stance on foreign policy.