EMERGING MARKETS-Assets wilt in the glare of stronger dollar

jueves 5 de marzo de 2015 06:26 GYT

By Chris Vellacott

LONDON, March 5 (Reuters) - Emerging market stocks fell to a three-week low on Thursday as a buoyant dollar and China calling its lowest growth for 25 years a 'new normal' soured the mood among investors.

The MSCI emerging equities index was 0.2 percent lower at a level last seen in mid February, while the Asia excluding Japan benchmark, fell 0.4 percent.

A strengthening dollar, driven by anticipation of tighter monetary policy in the United States, continues to pressure emerging assets. The dollar index reached an 11-year high and most emerging currencies weakened.

"There's a lot of expectations of a Fed rate hike built in. There are exceptions, like the central European countries, but most of the dollar-based currencies are really focusing on the U.S. and the likely pickup in U.S. rates," said Simon Quijano-Evans, head of emerging research at Commerzbank.

Also adding to pressure on emerging markets is the prospect of an economic slowdown in China after Beijing announced a 7 percent growth target for the year and signaled that the lowest rate of expansion for a quarter of a century is the "new normal".

Shanghai stocks traded 1 pct lower while Hong Kong dropped 1.2 percent.

Turkey's lira was 0.9 percent lower against the dollar as investors remained nervous about threats to central bank independence following tirades against monetary policy by president Tayyip Erdogan.

Shares in Turkey's Akbank were 5 percent lower after Citigroup announced it has sold its nearly 10 percent stake for $1.2 billion.   Continuación...