Feb 21 (Reuters) – A gauge of emerging market stocks recovered to levels last seen at the start of the year on Wednesday, boosted by strong gains in Chinese equities, while the South African rand was flat ahead of a pre-election budget speech.
As of 0905 GMT, MSCI’s gauge for emerging market stocks .MSCIEF rose 0.1%, briefly touching a near seven-month high, buoyed by advances in Chinese shares.
China blue-chips .CSI300 closed 1.4% higher, its seventh straight day of gains, while equities in Shanghai .SSEC advanced 1.0% as investors took heart over policymakers’ efforts to boost market confidence.
China’s stock exchanges said major quant fund Lingjun Investment had broken rules on orderly trading and barred it from buying and selling for three days, as part of wider regulatory efforts to revive market confidence.
The South African rand ZAR= edged 0.1% lower to 18.91 per dollar ahead of the 2024 budget speech by Finance Minister Enoch Godongwana at 1200 GMT.
“The challenge for South Africa’s finance minister will be seeking out pre-election giveaways while continuing to show that South Africa’s debt-to-GDP trajectory will be stabilising at around 78% in 2025/26 … that will be a challenging task given weak growth,” Chris Turner, global head of markets at ING wrote in a note.
Separately, South Africa’s headline consumer inflation quickened to 5.3% year-on-year in January from 5.1% in December.
Currencies in emerging Europe traded in a tight range owing to a lack of catalysts, with Hungary’s forint EURHUF= tipping 0.4% lower against the euro.
Poland’s zloty EURPLN= eased 0.1%, while the Czech crown EURCZK= was pinned at 21-month lows, trading at 25.393 per euro. A broader index of EM currencies .MIEM00000CUS was flat.
The Romanian leu EURRON= was flat at 4.974 per euro, while stocks in Bucharest .BETI gained 0.6% ahead of minutes from the Romanian central bank’s last policy meeting on Friday.
Later in the day, minutes from the Federal Reserve’s latest policy meeting would be eyed, as global markets re-assess the timing of interest rate cuts following stubbornly-high inflation data in the world’s biggest economy last week.
Elsewhere in emerging markets, Pakistan’s sovereign dollar bonds jumped after two major political parties said late on Tuesday they had reached an agreement to form a coalition government.
HIGHLIGHTS:
** Bank Indonesia holds rates, keeps tips for cut in second half
** Turkish consumer confidence slips in February, official data shows
** South Africa to hold national and provincial elections on May 29
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Sharon Singleton)
