EMERGING MARKETS-China stocks at 2-month high against lacklustre emerging backdrop
By Claire Milhench
LONDON Oct 20 (Reuters) - Chinese mainland shares touched two-month highs on Tuesday as investors bet on more stimulus following the recent raft of lacklustre data, but the gains did not extend to broader emerging equities.
Chinese indexes in Shanghai and Shenzen rose more than 1 percent to the highest since late August.
But MSCI's main emerging equity index slipped 0.4 percent, dragged lower by a subdued performance in Hong Kong .
China's third quarter GDP data on Monday was slightly better-than-expected at 6.9 percent, but not so strong that it would head off further stimulus measures. This could account for the bounce in Chinese stocks, said William Jackson, senior emerging markets economist at Capital Economics.
"There were concerns about a slowdown in China and debt levels in emerging markets and looking at the data, some of the sell off seemed a bit excessive," Jackson said, adding upcoming growth data from emerging markets would show if the sell off reflected the economic reality.
China will launch its first overseas "dim sum" renminbi bond from London later on Tuesday, with initial guidance at 3.3 percent for the one-year issue. The net proceeds from the unrated, fixed-rate, senior unsecured notes will be used to support the Chinese central bank's functions.
Axa IM's head of Asian fixed income Jim Veneau said in a note that this level was attractive since 10-year onshore bonds yielded only 3 percent.
Currency performance was mixed despite dollar weakness. Continuación...