INSUBCONTINENT EXCLUSIVE:
Emerging market shares rose on Friday while currencies remained under pressure against a backdrop of uncertainty surrounding Brexit, in what
has been a largely positive week driven by lower oil prices and cautious trade optimism.
The broader index for emerging markets was on track
for a 0.7 per cent weekly gain with shares in Turkey and South Africa gaining nearly 1 per cent each on the day.
A possible easing of
Sino-US trade tensions boosted emerging shares although investors remained cautious about an actual agreement.
While China sent a written
response to US demands for trade reforms, Washington said this was unlikely to prompt a breakthrough at talks between Presidents Donald
Trump and Xi Jinping later this month.
"We are of the view the summit will not lead to a trade agreement between the two countries, rollback
of existing tariffs, or even a commitment to not implement further tariffs," said Citigroup in a note
"But the outcome may be similar to the US-North Korean summit a path to de-escalate tensions going forward."
Mainland Chinese shares
finished higher on stimulus measures to support markets and private businesses
But, Taiwan's shares fell 0.3 per cent on the back of chipmakers clocking hefty losses following Nvidia's drop overnight.
A softer
dollar did little to benefit most currencies even as the sterling fell after a series of resignations rocked British Prime Minister Theresa
May's government and threw into doubt her long-awaited Brexit agreement.
"There is generally a weak risk environment related to the issues
in Europe around Brexit and the uncertainty there," said Jakob Christensen, chief analyst and head of EM research at Danske Bank.
"In
addition the weakness in the global economy is the background that adds to the anxiety
These two factors play a role here and despite the lower dollar, they add concerns about risk assets," added Christensen.
The Russian rouble
turned negative after trying to test a 2-week peak against the dollar as traders assessed geopolitical risks, while a recovery in oil prices
pushed stocks higher.
The Chinese yuan declined 0.1 per cent against the dollar, but was on course for a winning week as comments from the
central bank eased pressure to lend.
Chinese financial institutions should take steps to reasonably manage the pace and intensity of credit
supply, the central bank said on Friday, following a sharp slowdown in credit growth last month.
The Turkish lira was little changed despite
industrial production data showing a 2.7 per cent fall in September, further evidence that the country is poised for a recession.
On the
week, however, the currency is on course for a 2 per cent rise thanks to a jump on Thursday after a report that the US government is
exploring possible ways to remove US-based Muslim cleric Fethullah Gulen, a staunch critic of Turkish President Tayyip Erdogan.
Ankara's
demand for Gulen's extradition has been one element in a dispute with Washington.
Eastern European currencies were mostly steady against
The Polish zloty was little changed after a newspaper report that the country's central bank governor may resign.
