January 3, 2018 / 10:06 AM / 15 days ago

EMERGING MARKETS-Emerging stocks hit multi-year highs on growth cheer, dollar

LONDON, Jan 3 (Reuters) - Emerging stocks scaled a more than six-year peak on Wednesday thanks to a tepid dollar and numbers showing the global economy was expanding at a healthy clip.

Turkish inflation data showed little sign of pressure on policymakers’ easing.

With world stocks edging to another record high, MSCI’s emerging market benchmark index advanced 0.6 percent to trade at its strongest since May 2011.

Bourses in Turkey and the Philippines romped to fresh historic records, while Chinese blue chips gained for the fourth session running. Thailand stocks traded at their strongest in 24-years while Hong Kong rose to a decade high and Russian dollar-stocks jumped more than 1 percent to their highest in 11 months.

Markets were buoyed by Tuesday’s data showing healthy growth numbers across developed and emerging economies, which also gave a tailwind to commodities.

Adding to the emerging cheer was the dollar languishing close to the more than three months trough hit on Wednesday.

“The dollar is trading on a fairly weak footing at the moment which tends to be supportive for emerging markets, especially those with significant dollar debt like some of the Asian countries, but also Turkey and South Africa,” said Jakob Christensen, head of EM research at Danske Bank.

South Africa’s rand strengthened 0.7 percent, wiping out the previous day’s losses, while Russia’s rouble added 0.3 percent supported by Brent oil futures trading firmly above $66.

Turkey’s lira strengthened 0.1 percent as data showed consumer prices rising 11.92 percent in December, exceeding expectations and coming in sharply above a government forecast, yet off the 14-year peak it had hit in November.

High inflation is one of the biggest challenges facing the Turkish economy, which has grown strongly after a short-lived downturn following a failed coup in July 2016.

“For the market it’s important to see what it will mean for the central bank – do they have to react again? The market is probably taking the view that there will be higher rates,” said Christensen.

Inflation data is also due in Poland later in the day - the first to release across the region, where numbers often move in tandem. Poland’s figures are expected to show a decline in the annual inflation rate to 2.15 percent, which could hint at a possible later than projected monetary policy tightening in the region.

Emerging European currencies were broadly trading a touch weaker against the euro EURPLN=>, yet the losses followed recent multi-week and month highs.

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 1182.55 +4.57 +0.39 +2.08

Czech Rep 1088.66 +5.01 +0.46 +0.97

Poland 2461.28 +0.07 +0.01 +0.00

Hungary 39381.48 -62.09 -0.16 +0.01

Romania 7820.49 +66.75 +0.86 +0.86

Greece 817.16 -1.35 -0.16 +1.84

Russia 1171.41 +16.98 +1.47 +1.47

South Africa 52343.52 -480.47 -0.91 -0.36

Turkey 18135.18 +610.98 +0.52 +2.43

China 3370.10 +21.77 +0.65 +1.90

India 33779.79 -32.47 -0.10 -0.81

Currencies Latest Prev Local Local

close currency currency

% change % change

in 2018

Czech Rep 25.58 25.49 -0.34 -0.19

Poland 4.17 4.16 -0.16 +0.20

Hungary 309.42 308.90 -0.17 +0.36

Romania 4.64 4.65 +0.16 +0.83

Serbia 118.65 118.27 -0.32 -0.21

Russia 57.37 57.52 +0.25 +0.50

Kazakhstan 333.22 332.80 -0.13 -0.13

Ukraine 27.85 28.15 +1.06 +1.06

South Africa 12.36 12.45 +0.73 -0.02

Kenya 103.25 103.20 -0.05 -0.15

Israel 3.46 3.45 -0.10 +0.65

Turkey 3.76 3.77 +0.15 +0.77

China 6.50 6.49 -0.12 +0.11

India 63.50 63.45 -0.08 +0.52

Brazil 3.26 3.26 -0.00 +1.64

Mexico 19.43 19.53 +0.55 +1.15

Debt Index Strip Spd Chg %Rtn Index

Sov‘gn Debt EMBIG 307 2 .00 8 07.53 1

All data taken from Reuters at 09:59 GMT. Currency percent change calculated from the daily U.S. close at 2130 GMT.

Reporting by Karin Strohecker, additional reporting and graphic by Claire Milhench Editing by Jeremy Gaunt

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