Nov 16 (Reuters) – Emerging markets’ stocks slipped on Thursday dragged by heavyweight China shares on glum domestic economic data, while the Philippine peso was steady against the dollar, paring early losses after its central bank kept interest rates steady as expected.
MSCI’s index tracking emerging market equities .MSCIEF, slipped 0.1% by 0955 GMT. The index was set to snap three straight sessions of gains if losses hold.
China’s new home prices fell for the fourth straight month, suggesting a broader weakening in the sector that could drag on the country’s overall recovery.
The Shanghai Composite Index .SSEC dropped 0.7%, while blue-chip shares .CSI300 fell nearly 1%. Hong Kong’s Hang Seng Index .HSI dropped 1.4%.
The yuan CNY=CFXS was flat and the latest home prices data dampened recovery sentiment in the world’s second-largest economy and comes a day after positive industrial output and retail sales for October.
On the geopolitical front, signs of improving relations emerged after U.S. President Joe Biden and Chinese leader Xi Jinping agreed on Wednesday to resume military-to-military communications and cooperate on anti-drug policies.
However, some investors were disappointed at the lack of any major breakthroughs in the talks.
Capping broader equity losses, Pakistan’s benchmark stock index .KSE jumped 1.3% after the International Monetary Fund (IMF) said it had reached a staff-level agreement with Pakistan on the first review of a $3 billion bailout, which will unlock $700 million in funding for the country.
India’s NSE Nifty 50 index .NSEI and the benchmark S&P BSE Sensex .BSESN advanced 0.5% each, lifted by information technology stocks. .BO
The Philippine central bank kept its policy rate steady at 6.5% on Thursday, as expected, warning that its fight with inflation was not over and it could raise rates again.
The peso PHP= pared losses after the rate decision and was last seen steady against the dollar. The benchmark stock index .PSI rose 0.3%.
A basket of regional currencies .MIEM00000CUS inched up 0.1% led by gains in the South Korean won.
The won KRW=KFTC jumped 1.1% after authorities planned to loosen stock short-selling rules for retail investors, while tightening rules for institutional and foreign investors.
Having fallen earlier this week on cooling U.S. inflation, the dollar index =USD clawed back some gains on Thursday after a mixed set of U.S. economic data on Wednesday.
“We think investors are still under-pricing risks that Fed rates will pause for longer, which could weigh on EM asset performance during Q1, although easing longer-end rates and downwards pressure on the dollar could also marginally alleviate pressure on EM,” Tellimer Research said in a note.
The South African rand ZAR= weakened 0.2% against a steady dollar, while most central and eastern European currencies edged up against the euro.
On the data front, Israel’s preliminary third-quarter readings, Brazil’s September economic activity, Poland’s October core inflation and Colombia’s September trade balance are due later in the day.
(Reporting by Siddarth S in Bengaluru; editing by Eileen Soreng)
