March 12 (Reuters) – Emerging market stocks climbed to a seven-month high on Tuesday, while currencies languished, with investors awaiting a crucial U.S. inflation report for insights into the timing for the Federal Reserve’s rate cuts this year.
The MSCI emerging market stocks index .MSCIEF advanced 0.9% as of 5:30 a.m. ET (0930) GMT, hitting its highest level since August 2023 and on track for its fifth straight daily gain.
The currencies index .MIEM00000CUS was largely flat, after touching an over two-month high during the day.
U.S. consumer prices data, due later in the day, and producer prices on Thursday will help investors gauge the timing of the first Federal Reserve interest-rate cut, seen in June as per a Reuters poll. The Fed’s March policy decision is due next week.
“We could be moving towards the point where both the Fed and ECB are ready to cut rates… an inline or weaker (CPI) print would reinforce our view of the June cut and be welcomed by the markets,” Mohit Kumar, European economist at Jefferies, said in a note.
The Russian rouble RUBUTSTN=MCX weakened slightly against the dollar and was seen trading in a narrow range, while South Africa’s rand ZAR= climbed slightly ahead of the U.S. data.
Among major developments, Vanke’s Hong Kong-listed shares 2202.HK jumped 10.3%, along with its bonds, after China’s No.2 property developer said the impact of a Moody’s ratings downgrade on financing activities was “controllable”, though some analysts remain concerned over its longer-term liquidity.
The Hang Seng Mainland Properties index .HSMPI logged its strongest one-day gain of 8.0% in six months, while the real estate sector .CSI000952 climbed 5%. The Hang Seng index .HSI advanced to a three-month high, gaining 3.1%.
Egypt’s benchmark stock index .EGX30 shed over 1% after touching a record high on Monday on upbeat sentiment driven by financing from United Arab Emirates and the International Monetary Fund.
Meanwhile in Central and East Europe, data showed Czech adjusted retail sales excluding cars and motorcycles increased by 2.4% year-on-year in January, while a media report stated central bank Vice-Governor Eva Zamrazilova said Czech interest rate cuts of 25 or 50 basis points are acceptable and bigger cuts should not be considered.
The Czech crown EURCZK= was up 0.2% against the euro.
The Polish zloty has outperformed its CEE peers in 2024, gaining more than 1% this year, owing to accelerated rate cuts in the Czech Republic and Hungary.
Argentina’s central bank cut its benchmark interest rate to 80% from 100% previously on Monday.
(Reporting by Ankika Biswas in Bengaluru; Editing by Ros Russell)
