* Israel CDS hit over 10-year high – S&P Global
* Country Garden bondholders seek talks after missed payment
* Powell’s remarks eyed at 1600 GMT
* EM stocks drop 1.2%, FX shed 0.2%
Oct 19 (Reuters) – Sentiment was fragile on Thursday,
with risky emerging markets stocks and currencies in the red as
interest rate worries gathered steam and tensions in the Middle
East showed little signs of easing.
MSCI’s gauge for emerging markets equities had
dropped 1.2% to a near two-week low by 0904 GMT.
The currencies index also fell 0.2%,
pressured by rising U.S. bond yields on both long and
short-dated tenors which hit multi-year highs.
With latest U.S. data hinting at a resilient economy,
traders are pricing in restrictive monetary policy for a while
as they await Federal Reserve Chair Jerome Powell’s remarks at
1600 GMT.
“As much as (EM central banks) like to keep up with the Fed,
many of them had pushed rates into restrictive territory and do
need to dial back a bit in order to support growth,” Jonathan
Petersen, senior markets economist at Capital Economics said.
“It could keep rates elevated a little bit longer than maybe
we had anticipated in emerging markets but ultimately this is a
negative.”
Meanwhile, worries about China’s embattled property sector
mounted, with Country Garden’s bondholders seeking
urgent talks with the troubled property giant after it missed a
$15 million coupon repayment, sources said.
Hong Kong’s Hang Seng tumbled 2.5%, bogged down by a
2.5% drop in property stocks.
Separately, data showed China’s September new home prices
fell, dashing hopes of a turnaround in demand during a
traditionally peak home buying period despite efforts to revive
the crisis-hit sector.
Furthermore, the Israel-Hamas conflict continued to be
factor for the mood across markets over the past couple of
sessions as investors watched out for any signs of escalation.
The Israeli shekel held steady against the dollar,
while the cost of insuring Israel’s debt against default shot
over a 10-year high, according to S&P Global Market
Intelligence.
Bringing some relief to inflation worries, oil prices eased
after OPEC showed no signs of supporting Iran’s call for an oil
embargo on Israel and as the U.S. planned to ease Venezuela
sanctions.
In eastern and central Europe, Polish September industrial
output fell by 3.1% on an annual basis, missing a forecast of
3.6% decline. The zloty inched up 0.1% against the
euro.
Romania’s leu was little changed ahead of the
publication of central bank’s minutes on monetary policy issues
due at 1200 GMT.
For GRAPHIC on emerging market FX performance in 2023, see http://tmsnrt.rs/2egbfVh
For GRAPHIC on MSCI emerging index performance in 2023, see https://tmsnrt.rs/2OusNdX
For TOP NEWS across emerging markets
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see
(Reporting by Johann M Cherian in Bengaluru; Editing by Alison
Williams)
