January 26, 2018 / 10:23 AM / 10 months ago

EMERGING MARKETS-Emerging stocks hit 10-yr high, rand roars on waning dollar

LONDON, Jan 26 (Reuters) - Lifted by optimism about global growth and a weaker dollar, emerging markets enjoyed another stellar end to the week on Friday, with stocks hitting a 10-year peak while currencies soared and South Africa’s rand roared to a 2-1/2 year high.

MSCI’s emerging markets benchmark, up 0.4 percent on the day, is on track for a 3 percent rise since Monday in a seventh straight week of gains — the longest such winning streak since October 2010. Hong Kong’s Hang Seng index jumped 1.5 percent to a new record high as financial and property stocks pushed higher.

Lifted by a synchronised uptick in global growth, equity markets have been on a tear over the past year while a weaker dollar lifting commodity prices and weighing on borrowing costs has bolstered emerging economies.

But markets will keep a close eye on U.S. President Donald Trump’s appearance at the World Economic Forum in Davos after he imposed tariffs on solar panels and washing machines, the first unilateral trade restrictions as part of a broader protectionist agenda.

In Davos, Trump will tell political leaders and chief executives later in the day that his administration will not tolerate intellectual property theft and trade abuses, according to a U.S. official.

“The revival of ‘America First’ is interesting to watch for markets,” said Jakob Christensen, head of EM research at Danske Bank.

“(Trump’s) view on overall protectionism is an important theme and if he does reiterate something on the dollar it is also of huge interest to the markets,” he said, adding Asian manufacturing countries and Mexico were first in line to feel the pinch from protectionism.

Emerging currencies cheered the drop in the dollar, with the index hitting a three-year low.

South Africa’s rand strengthened 0.6 percent on the day and looks set for a second week of gains. Turkey’s lira gained 0.5 percent and was on track for its best week since last August. Firmer oil supported Russia’s rouble, helping the currency to its best week since October.

China’s yuan was set for its best week since September. The currency has gained 2.8 percent year-to-date, following a rise of about 6.8 percent against the dollar in 2017.

However, Brazil’s real weakened after Wednesday’s court decision to uphold the corruption conviction of former President Luiz Inacio Lula da Silva brought more uncertainty for the October elections.

For GRAPHIC on emerging market FX performance 2017, see tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2017, see 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

on year

Morgan Stanley Emrg Mkt Indx 1268.15 +4.70 +0.37 +9.47

Czech Rep 1130.76 -3.00 -0.26 +4.88

Poland 2597.90 +8.60 +0.33 +5.55

Hungary 40659.70 +228.05 +0.56 +3.26

Romania 8433.95 +20.49 +0.24 +8.77

Greece 879.09 +1.62 +0.18 +9.56

Russia 1299.42 -11.79 -0.90 +12.56

South Africa 54599.94 +41.92 +0.08 +3.93

Turkey 20095.24 +1491.19 +1.26 +4.13

China 3559.09 +10.78 +0.30 +7.62

India 36050.44 -111.20 -0.31 +5.85

Currencies Latest Prev Local Local

close currency currency

% change % change

in 2018

Czech Rep 25.37 25.35 -0.07 +0.63

Poland 4.15 4.14 -0.13 +0.68

Hungary 309.61 309.10 -0.16 +0.30

Romania 4.67 4.67 +0.10 +0.20

Serbia 118.48 118.65 +0.14 -0.07

Russia 55.83 55.93 +0.19 +3.28

Kazakhstan 321.31 320.11 -0.37 +3.58

Ukraine 28.50 28.72 +0.77 -1.25

South Africa 11.84 11.91 +0.57 +4.34

Kenya 102.20 102.30 +0.10 +0.88

Israel 3.39 3.39 +0.17 +2.67

Turkey 3.74 3.75 +0.36 +1.36

China 6.32 6.32 -0.02 +2.95

India 63.54 63.51 -0.04 +0.46

Brazil 3.15 3.15 -0.00 +5.25

Mexico 18.53 18.60 +0.36 +6.02

Debt Index Strip Spd Chg %Rtn Index

Sov’gn Debt EMBIG 295 -1 .04 8 08.19 1

Reporting by Karin Strohecker, additional reporting and graphic by Claire Milhench, editing by Angus MacSwan

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