EMERGING MARKETS-Stocks and rand rocky as Brexit storm swirls before Fed minutes
* MSCI EM stocks index down 1.2 percent for second day * Rand down 1 percent, Mex peso, Turk lira, rouble down 0.5 pct * Poland expected to keep rates at 1.5 pct By Marc Jones LONDON, July 6 (Reuters) - Emerging market currencies and stocks drifted lower in Europe on Wednesday, having been lashed overnight by a renewed wave of Brexit anxiety, Chinese currency weakness and oil price falls. The ugly mix pushed MSCI's benchmark EM index down 1.2 percent for a second day running and left South Africa's rand down 1 percent and Turkey's lira, Mexico's peso and Russia's rouble all down 0.5 percent. The prospect of what could be some dovish U.S. Federal Reserve minutes later helped slow the selling in European trading though it couldn't stem it completely. Polish stocks and zloty , which have borne the brunt of the Brexit stress in emerging markets, dropped for a fifth and fourth day respectively to take the share losses since April to 15 percent. Poland's central bank is also meeting on Wednesday. It is widely expected to keep interest rates at 1.5 percent, but traders will be keen to hear what the new head of the bank, Adam Glapinski, thinks will be the impact of Brexit on the economy. "We still think Poland's next move could be a (interest rate) cut," said Rabobank strategist Piotr Matys. "Probably not this year, but early next year when we will have a better picture on Brexit and the impact on the Polish economy." The general sense of global uncertainty saw the cost of insuring emerging market countries' debt continue to creep up, even as global bond yields continued to slide. A heavy drop in oil prices to back under $48 a barrel added pressure. Russian stocks slid in line with the rouble after Latin American stocks, which have had a bumper 2016 so far, dropped 2.3 percent on Tuesday. Questions also lurked over China's intentions for its currency after the yuan fell for to a fifth consecutive session as the People's Bank of China set its daily guidance rate at its lowest since November 2010. State-run banks later sold the dollar, limiting the yuan's fall, traders said though the moves continued to buffet other Asian currencies. South Korea's won and Taiwan's dollar both touched one-week lows. Many Southeast Asian currencies meanwhile were barely traded as local markets closed to celebrate the end of the Muslim fasting month. "It is way too early to consider buying EM assets," Rabobank's Matys said of the onging selloff. "It is not over so I maintain my very cautious view." Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg on year Morgan Stanley Emrg Mkt Indx 820.36 -11.32 -1.36 +3.30 Czech Rep 826.29 +1.86 +0.23 -13.60 Poland 1693.91 -22.04 -1.28 -8.89 Hungary 26202.60 -223.27 -0.84 +9.54 Romania 6491.68 -21.46 -0.33 -7.32 Greece 522.87 -4.29 -0.81 -17.18 Russia 917.61 -7.62 -0.82 +21.21 South Africa 44659.21 -671.72 -1.48 -2.49 Turkey 78387.70 +435.59 +0.56 +9.29 China 3017.10 +10.71 +0.36 -14.75 India 27166.87 -111.89 -0.41 +4.02 Currencies Latest Prev Local Local close currency currency % change % change in 2016 Czech Rep 27.05 27.04 -0.03 -0.18 Poland 4.45 4.44 -0.23 -4.28 Hungary 316.33 316.34 +0.00 -0.53 Romania 4.52 4.52 +0.06 -0.03 Serbia 123.30 123.12 -0.15 -1.48 Russia 64.69 64.37 -0.50 +12.76 Kazakhstan 337.01 337.16 +0.04 +1.04 Ukraine 24.83 24.82 -0.02 -3.52 South Africa 14.85 14.75 -0.68 +4.15 Kenya 101.05 101.00 -0.05 +1.14 Israel 3.89 3.89 -0.14 -0.18 Turkey 2.94 2.93 -0.36 -0.76 China 6.69 6.68 -0.18 -2.95 India 67.52 67.42 -0.13 -1.95 Brazil 3.30 3.30 -0.01 +19.90 Mexico 18.86 18.81 -0.29 -8.98 Debt Index Strip Spd Chg %Rtn Index Sov'gn Debt EMBIG 407 3 .01 7 50.70 1 Currency percent change calculated from the daily U.S. close at 2130 GMT. For GRAPHIC on emerging market FX performance 2016, see link.reuters.com/jus35t For GRAPHIC on MSCI emerging index performance 2016, see link.reuters.com/weh36s For GRAPHIC on MSCI emerging Europe performance 2016, see link.reuters.com/jun28s For GRAPHIC on MSCI frontier index performance 2016, see link.reuters.com/zyh97s For CENTRAL EUROPE market report, see For TURKISH market report, see For RUSSIAN market report, see ) (Editing by Raissa Kasolowsky)
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