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EMERGING MARKETS-Political risks keep emerging stocks near 2-mth lows
December 7, 2017 / 11:05 AM / 8 days ago

EMERGING MARKETS-Political risks keep emerging stocks near 2-mth lows

LONDON, Dec 7 (Reuters) - Political risks and a firm dollar kept emerging markets in check on Thursday, with equities trading near two-month lows and currencies losing more ground against the greenback.

A selloff in tech shares had pummelled emerging shares on Wednesday but while the sector enjoyed a small recovery, the broader emerging equity index seesawed around flat.

The focus is now on the United States where Congress and the White House face a Friday deadline to raise the debt limit and avert a shutdown in government spending.

On currency markets the rand and the lira tumbled half a percent against the greenback, which is close to two-week highs , while the rouble weakened to new two-week lows, hurt by the finance ministry’s plans to raise dollar purchases .

Markets will also be wary of adding more emerging market risk before events such as Friday’s U.S. jobs data, next week’s expected 25 basis-point U.S. rate rise and a central bank meeting in Turkey which will be key to stabilising the lira.

“It seems we are heading into a mini ‘perfect storm’ for emerging markets. Optimism on U.S. tax reforms is supporting dollar and U.S. yields, while equity markets are experiencing a decent correction and portfolio flows are turning negative,” Credit Agricole wrote, predicting more pressure in coming days.

JPMorgan’s ELMI Plus index, a key emerging currency gauge, closed on Wednesday at two-week lows.

South African stocks traded at six-week lows, extending Wednesday’s plunge, which was the biggest daily fall in a year. The losses were caused by a selloff in Steinhoff shares when the firm announced an investigation into accounting irregularities .

Steinhoff remained under pressure falling another 32 percent in Johannesburg.

In the Gulf, Qatari stocks fell 0.3 percent, reversing recent gains that were driven by hopes of a resolution to its diplomatic dispute with other Gulf states. Those hopes have been dashed.

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 1102.66 +1.47 +0.13 +27.88

Czech Rep 1055.84 +2.69 +0.26 +14.56

Poland 2406.06 +11.39 +0.48 +23.52

Hungary 37919.73 +328.20 +0.87 +18.49

Romania 7668.87 -1.29 -0.02 +8.24

Greece 726.73 -0.80 -0.11 +12.91

Russia 1124.99 -6.39 -0.56 -2.37

South Africa 51515.70 -56.75 -0.11 +17.34

Turkey 06003.74 +699.80 +0.66 +35.66

China 3272.01 -21.96 -0.67 +5.42

India 32949.21 +352.03 +1.08 +23.75

Currencies Latest Prev Local Local

close currency currency

% change % change

in 2017

Czech Rep 25.60 25.61 +0.06 +5.50

Poland 4.21 4.21 +0.02 +4.59

Hungary 314.47 314.10 -0.12 -1.80

Romania 4.63 4.63 -0.04 -2.05

Serbia 119.60 119.41 -0.16 +3.14

Russia 59.15 59.17 +0.03 +3.57

Kazakhstan 334.57 333.93 -0.19 -0.27

Ukraine 27.10 27.10 +0.00 -0.37

South Africa 13.56 13.50 -0.43 +1.26

Kenya 102.90 102.80 -0.10 -0.52

Israel 3.52 3.51 -0.06 +9.54

Turkey 3.86 3.85 -0.34 -8.70

China 6.62 6.61 -0.02 +4.96

India 64.57 64.52 -0.08 +5.23

Brazil 3.24 3.24 -0.00 +0.54

Mexico 18.88 18.86 -0.09 +9.74

Debt Index Strip Spd Chg %Rtn Index

Sov‘gn Debt EMBIG 315 -1 .02 8 05.73 1

Editing by Matthew Mpoke Bigg

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