EMERGING MARKETS-Turkish stocks at 7-mth high, zloty hits highest this year

jueves 29 de mayo de 2014 05:58 GYT
 

By Carolyn Cohn

LONDON May 29 (Reuters) - The prospect of monetary easing by the European Central Bank next week boosted stocks and currencies in Europe's emerging markets on Thursday, driving Turkish stocks to seven-month highs and the zloty to its highest this year against the euro.

High-yielding emerging markets have risen on expectations the ECB will opt for negative interest rates. In addition, there is speculation about monetary stimulus in China and that the U.S. Federal Reserve will not raise rates any time soon.

"The global backdrop has turned very supportive because of expectations of further policy easing by the ECB and acknowledgement the Fed will move very slowly," Neil Shearing, head of emerging markets research at Capital Economics, said.

Turkish stocks hit seven-month highs also partly in response to speculation of further interest rate cuts by the country's central bank.

Prime Minister Tayyip Erdogan has been scathing about the central bank's 50 basis-point cut in its one-week repo rate last week, urging bigger cuts to keep economic growth up ahead of presidential elections in August in which he is expected to run.

The zloty rose to its highest this year against the euro , with a potential ECB rate cut likely to increase the interest rate differential in favour of the Polish currency.

The MSCI emerging equities index was steady below recent near-seven-month highs. Many Western European markets were shut for Ascension Day holidays.

Russian stocks rose 1 percent on hopes of a new round of diplomacy over Ukraine. Ukraine's president-elect Petro Poroshenko and Russian president Vladimir Putin are both attending a lunch with world leaders on June 6 to mark the 70th anniversary of the World War Two "D-Day" landings in Normandy.   Continuación...