Emerging stocks soar led by South Korea and India
Gains made across Asia with the South Korea and India bourses hitting record highs. Reuters
Emerging stocks were on track for their best week since March on Friday and currencies looked to chalk up solid weekly gains, sailing the slipstream of cautious tones from the US Federal Reserve and a tepid dollar.
MSCI's emerging market index edged higher on the day to scale a new 26-month peak, poised for a near 4 per cent gain over the week. The index was lifted by stellar gains across Asia, with heavyweight South Korea and the India bourse touching record highs, while others such as Hong Kong hovered around multi-month peaks.
Currencies were mixed on the day against the dollar which retreated to a nine-month low earlier in the week following the remarks on rate hikes by Federal Reserve chair Janet Yellen.
However, most were on track for solid weekly gains. The South African rand and the Turkish lira - the two currencies most vulnerable to higher US interest rates were on track to snap a three-week losing streak and strengthen 1.5 per cent over the week.
Russia's rouble was up 1.2 per cent on the week, finding some support in oil prices looking to end the week around 4 per cent higher.
"Global risk appetite has been good, most major stock markets are up over the week... thanks to a mixture of Yellen and okay growth but not threatening growth," said Paul Fage, senior emerging markets strategist at TD Securities.
Adding to the chipper mood was Fitch Ratings, which early on Friday confirmed its A+ rating on China with a stable outlook, citing the strength of the external finances and the macroeconomic record of the world's second largest economy.
But investors were also awaiting a host of US economic indicators, including core inflation, retail sales and industrial production for June later in the session for more insight into how the Fed might proceed with monetary policy tightening this year.
Updated: July 14, 2017 03:49 PM