EMERGING MARKETS-Stocks dip from 2014 highs on service sector data

jueves 3 de abril de 2014 05:14 GYT

LONDON, April 3 (Reuters) - Emerging stocks dipped from 2014 highs on Thursday, dulled by weakness in emerging market service sector data, but remained in the black for the year on waning investor worries over Russia and Ukraine and a dash towards cheap markets.

Support for Ukraine from the IMF and other Western governments has reassured investors following Russia's annexation of Crimea.

Russia's services sector, however, contracted sharply, to 47.7 in March from 50.8 in February, data showed on Thursday, and South African services data also fell.

"(Weak PMI) forced people to pare back long emerging market positions," Peter Attard Montalto, emerging markets economist at Nomura, said.

The MSCI emerging equities index rose to its highest since mid-December before trimming gains.

Stocks have jumped by 6.6 percent in the past two weeks, however, boosted also by a reconsideration of the sector by investors due to cheap valuations.

Chinese stocks dropped 0.7 percent on Thursday on profit-taking in property stocks, although service sector activity ticked up in March.

Emerging sovereign debt spreads edged out 1 basis point to 316 bps over U.S. Treasuries. But spreads remain close to their narrowest levels since May 2013, when then-Federal Reserve chairman Ben Bernanke signalled a winding down of the Fed's bond-buying programme.

Frontier market borrowers Ecuador, Pakistan and Zambia are meeting investors this week to discuss possible dollar-borrowing plans. Even Ukraine is considering issuing a 5-year eurobond in the second half of this year.   Continuación...