LONDON, Sept 15 (Reuters) - Unfazed by another North Korean missile launch, emerging market equities were set to end the week up almost 1 percent on Friday, taking their cue from developed markets.
MSCI's benchmark emerging stocks index was up 0.2 percent on the day, with index heavyweights South Korea up 0.35 percent and Taiwan up 0.25 percent.
There was a limited reaction to North Korea's latest missile launch over Japan, with many Asian markets ending higher.
"This is a repeat of an earlier test so perhaps markets don't see this as something increasingly provocative," said William Jackson, senior emerging markets economist at Capital Economics.
Instead, he said markets were taking their cue from positive sentiment in European and U.S. stocks.
The Dow Jones set a record closing high on Thursday and is up 1.8 percent so far this week, whilst European stocks have gained 1.5 percent. Polish and Hungarian shares gained 0.2-0.3 percent on the day, with the latter set to end the week up 2 percent.
Although U.S. consumer inflation rose faster than expected in August, prompting a repricing of U.S. rate rise expectations, Jackson said this hadn't had much impact on emerging markets: "Our view is that the Fed probably won't hike this year but will resume their tightening cycle next year."
Chinese stocks remained constrained by Thursday's disappointing economic activity data, but China's yuan firmed 0.2 percent after four days of losses.
The yuan was still set for its biggest weekly loss since November on speculation that the central bank may be looking to slow the rapid gains it has made this year.
Russian stocks slipped 0.5 percent as oil prices dipped back towards $55 a barrel. The rouble retreated 0.2 percent early on, but recovered to trade flat against the dollar before a central bank meeting on Friday which is expected to deliver a 0.5 percentage point rate cut to 8.5 percent.
Vladimir Tikhomirov, chief economist at BCS Global Markets, said Russia's annualised inflation had fallen to 3.3 percent, a post-Soviet era low, below the central bank's 4 percent target. "This gives the central bank a lot of room to manoeuvre," he said.
But he also noted the bank had stressed it would consider future inflationary trends in its rate decisions, and inflation expectations are still quite high.
"That's the major challenge for the central bank, and perhaps why they won't cut more aggressively."
S&P Global is also set to review Russia's sovereign rating later in the day, currently at BB+ with a positive outlook, but Tikhomirov was not expecting any change.
Although factors such as economic growth and lower inflation support the case for an upgrade, Tikhomirov said significant geopolitical risks, not least sanctions, remained.
In Latin America, Peru's opposition-controlled congress ousted centre-right President Pedro Pablo Kuczynski's cabinet in a vote of no-confidence, pitching the copper-producing Andean country into its worst political crisis in years.
The Brazilian real is down around 1 percent for the week so far with President Michel Temer facing new charges of obstruction of justice and racketeering.
Venezuela has said it will make all pending debt payments despite difficulties due to U.S. financial sanctions. Benchmark sovereign and PDVSA bonds were trading around 0.5 cents lower.
For GRAPHIC on emerging market FX performance 2017, see http://tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2017, see http://tmsnrt.rs/2dZbdP5
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see) Emerging Markets Prices from Reuters
Equities Latest Net Chg % Chg % Chg
Emrg Mkt Indx 1101.93 +2.04 +0.19 +27.79 Czech Rep 1045.72 +2.38 +0.23 +13.47 Poland 2511.66 +4.23 +0.17 +28.94 Hungary 38373.99 +130.79 +0.34 +19.91 Romania 8071.15 +47.11 +0.59 +13.92 Greece 784.40 -6.57 -0.83 +21.87 Russia 1117.96 -7.73 -0.69 -2.98 South Africa 49266.25 -248.58 -0.50 +12.22 Turkey 08207.45 -36.77 -0.03 +38.48 China 3353.67 -17.76 -0.53 +8.06 India 32189.89 -52.04 -0.16 +20.89 Currencies Latest Prev Local Local close currency currency
% change % change
Czech Rep 26.07 26.06 -0.04 +3.58
Poland 4.28 4.28 -0.13 +2.87
Hungary 308.79 308.46 -0.11 +0.01
Romania 4.60 4.60 +0.08 -1.35
Serbia 119.09 118.90 -0.16 +3.58
Russia 57.56 57.49 -0.12 +6.43
Kazakhstan 339.25 339.27 +0.01 -1.65
Ukraine 26.22 26.16 -0.23 +2.97
South Africa 13.13 13.12 -0.12 +4.56
Kenya 102.80 102.80 +0.00 -0.42
Israel 3.52 3.52 -0.10 +9.36
Turkey 3.43 3.43 -0.02 +2.74
China 6.54 6.55 +0.15 +6.13
India 64.08 64.12 +0.06 +6.03
Brazil 3.12 3.12 -0.05 +4.29
Mexico 17.67 17.66 -0.06 +17.22
Debt Index Strip Spd Chg %Rtn Index
Sov'gn Debt EMBIG 310 1 .04 8 07.09 1
(Reporting by Claire Milhench; Editing by Mark Trevelyan)