LONDON, Dec 5 (Reuters) - A selloff in technology shares hit emerging equities on Tuesday despite robust Chinese services data, though Turkish stock markets rose for the second day and the lira neared a one-month high to the dollar at one point. Global investors are rotating out of tech shares and into financial stocks, which may benefit more from U.S. corporate tax cuts and a potentially lighter regulatory touch for banks.
MSCI's emerging market tech index fell 1.2 percent to a five-week low, tracking the U.S. tech
sector lower . Amongst fallers, Hong Kong lost 1 percent, with Tencent dropping more than 3 percent, whilst semiconductor specialist Taiwan fell 0.8 percent. That
took MSCI's emerging equity benchmark down 0.4 percent .
Chinese blue chips bucked the trend, gaining 0.5
percent after Caixin services sector data showed activity at three-month highs in November. Turkish assets continued to firm, however, after weeks of selling caused by rising inflation and tensions between the United States and Turkey over the trial of a Turkish bank executive.
Turkish bank stocks jumped 1.6 percent to two-week
highs, the stock market gained around 1 percent and the lira firmed 0.2 percent for its fifth straight day of gains versus the dollar after President Tayyip Erdogan said he was not requesting a limit on capital flows. The currency later eased to trade flat versus the greenback. Erdogan was clarifying comments he had made on Sunday after Anadolu news agency said prosecutors were set to seize the assets of Turkish-Iranian gold trader Reza Zarrab, who is cooperating with U.S. prosecutors in the trial. Commerzbank analysts said his latest remarks may have routed speculators and triggered a "stop-loss cascade," noting bonds had also made powerful recoveries, despite bad news on inflation. Turkey's central bank has set an inflation target of 5 percent for 2018-2020, just a day after data showed inflation at a 14-year high of 12.98 percent. The average yield spread of Turkish sovereign bonds over Treasuries narrowed by 2 basis points (bps) to 305 bps, a one-month low.
The rand weakened 0.2 percent and South African shares tumbled 1.3 percent after private sector
activity data confirmed the economy's sluggish state.
The rand has firmed to near two-month highs in recent days on hopes that Deputy President Cyril Ramaphosa, seen as more business-friendly than rival Nkosazana Dlamini-Zuma, will become the next leader of the ruling ANC party. But JPMorgan analysts warned against complacency. "Markets have increasingly adopted expectations of a Cyril Ramaphosa win since mid-November, yet recent updates from the branch nominations process point to at most a narrow advantage or perhaps more likely no outright win for either the modernist or the traditionalist camp," they told clients. Elsewhere, Saudi Arabia's non-oil private sector growth hit two-year highs, indicating the bulk of the economy continued to operate as normal during an anti-corruption purge.
But Saudi stocks slipped 0.5 percent, ending a
nine-day winning streak, after former Yemeni president Ali Abdullah Saleh was killed.
The Polish zloty firmed a touch against the euro
before the central bank meets, when it is expected to keep rates at a record low of 1.5 percent but may warn on rising inflation.
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 1117.36 -4.59 -0.41 +29.58 Czech Rep 1063.75 -3.60 -0.34 +15.42 Poland 2418.21 +14.06 +0.58 +24.14 Hungary 37524.72 -280.65 -0.74 +17.25 Romania 7790.10 +7.64 +0.10 +9.95 Greece 736.82 -5.02 -0.68 +14.48 Russia 1130.17 -3.70 -0.33 -1.92 South Africa 52378.66 -697.92 -1.31 +19.31 Turkey 05932.61 +717.74 +0.68 +35.57 China 3303.04 -6.58 -0.20 +6.42 India 32822.57 -47.15 -0.14 +23.27 Currencies Latest Prev Local Local close currency currency
% change % change
Czech Rep 25.59 25.59 +0.00 +5.55 Poland 4.20 4.21 +0.14 +4.86 Hungary 313.65 313.63 -0.01 -1.54 Romania 4.63 4.63 +0.00 -2.03 Serbia 119.45 119.41 -0.03 +3.26 Russia 58.60 58.80 +0.33 +4.54 Kazakhstan 333.01 332.81 -0.06 +0.19 Ukraine 27.10 27.22 +0.44 -0.37 South Africa 13.53 13.51 -0.21 +1.46 Kenya 102.90 103.10 +0.19 -0.52 Israel 3.49 3.49 -0.15 +10.32 Turkey 3.87 3.87 +0.09 -8.85 China 6.61 6.62 +0.08 +4.99 India 64.45 64.37 -0.12 +5.42 Brazil 3.24 3.24 +0.00 +0.28 Mexico 18.62 18.60 -0.11 +11.23 Debt Index Strip Spd Chg %Rtn Index Sov'gn Debt EMBIG 314 -1 .05 8 03.85 1
All data taken from Reuters at 09:36 GMT. Currency percent change calculated from the daily U.S.
close at 2130 GMT.
(Reporting by Claire Milhench; Graphic by Sujata Rao; Editing