Emerging market stocks fall as Brexit vote sours mood

13 Mar, 2019

Emerging market stocks fell on Wednesday as investors stayed away from riskier assets ahead of more make-or-break British parliamentary votes on Brexit.

Currencies in the developing world made marginal moves after British lawmakers crushed May's Brexit deal on Tuesday night, forcing parliament to vote within days whether to back a no-deal Brexit or seek a last-minute delay.

"While the government's deal has now been rebuffed twice, the result of the vote still provides little clarity on the eventual outcome," said UBS analysts in a note.

On the trade front, U.S. trade representative Robert Lighthizer said he hoped talks with China were in the final stretch but warned that they still might not reach an agreement.

MSCI's index for emerging markets fell with Shanghai stocks leading losses and sizeable declines in Hong Kong and South Korea.

"Fairly mixed moves for EM today. Brexit headlines seems to have affected the markets in some part but its fairly quiet," said Jason Tuvey, senior economist, Capital Economics.

Moscow's MOEX index fell more than 0.3 percent, led by declines in material stocks.

Russian miner Norilsk Nickel's shares slid more than 3 percent after Crispian Investments sold 1.25 percent of its stake in the company.

Sri Lanka's shares hit a 5-1/2-year low as investors awaited a budget vote later in the day to assess the political stability of the government led by Prime Minister Ranil Wickremesinghe.

Stocks in Johannesburg rose 0.3 percent  with precious metal miners getting a boost from gold prices scaling a near two-week peak.

Most emerging market currencies made nominal moves except the trade-sensitive South Korean won which fell 0.4 percent.

Russia's rouble hit a two-week high helped by foreign interest in the country's treasury bonds and higher oil prices.

India's rupee rose marginally after data showed on Tuesday that consumer prices rose at a faster pace than anticipated in February.

In emerging Europe, Romania's leu came off seven-week lows after data showed industrial output was up 0.8 percent for the year.

Copyright Reuters, 2019
 

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