EM stocks index eyes best week since April as US recession worries fade
Updated at 0855 GMT
South African stocks touch record high
MSCI EM stocks, FX indexes set for weekly gains
Thai stocks rise after new PM selected
Lira sets new record low
By Lisa Pauline Mattackal
Aug 16 (Reuters) -Emerging market assets broadly rose on Friday, with MSCI's index tracking equities on track for its best week in nearly four months, as closely watched U.S. economic data soothed jitters over slowing growth while keeping the case for Federal Reserve September policy easing intact.
MSCI's index tracking emerging market stocks rose 1.6% as bourses in Asia broadly strengthened, led by stocks in Taiwan .TWII and the Philippines .PSI.
That tracked a rise in global stocks, after stronger-than-expected U.S. retail sales data on Thursday, in tandem with inflation data earlier in the week, brought relief to investors worried about growth in the world's largest economy after sharp bouts of volatility earlier in the month.
The EM stocks index is on track to rise 2.8% for the week, its best week since April. An index tracking emerging market currencies .MIEM00000CUS was flat on the day, but was set for weekly gains of 0.4% and is hovering around 2022 highs.
While stronger U.S. data saw investors dial back bets on a larger start to interest policy easing from the Fed, traders still expect a rate cut at its next meeting, which should boost demand for higher-yielding emerging market assets.
"The rush to seek higher yields in EM territories may subside given the slower easing cycle in the U.S., but there's no doubt that lower U.S. recession risk will give confidence to invest in EM," said Charlie Bird, FX trader at Verto.
"Naturally, we expect regions with strong ties to the U.S. to benefit in the medium term, but any global economic positivity will filter through all EM territories."
Among top performers in Africa, South African stocks .JTOPI jumped 1.1% on the day, touching a record high and on pace for weekly gains of 3%. The rand rose 0.4%, ZAR= set to continue an eight-day winning streak and for its best week since June.
Thai stocks .SETI rose 1% after Paetongtarn Shinawatra was selected as the country's prime minister, replacing Srettha Thavisin. The baht THB=TH edged 0.1% lower against the dollar.
Meanwhile, Russia's rouble RUB= was flat against the dollar, steadying after touching a 10-month low earlier in the week as Ukraine intensified an attack on Russian territory.
Israel's shekel ILS= was steady against the dollar as Gaza ceasefire negotiations continued.
Polish stocks .WIG20 led weekly gains in emerging Europe, up over 6%. The zloty EURPLN= was trading at a near three-week high versus the euro EUR=, on track to rise nearly 1% for the week.
Turkish stocks .XU100 were little changed on the day but on pace for their first weekly gain in four, while the lira TRYTOM=D3 touched a fresh record low to the dollar of 33.70.
HIGHLIGHTS:
** China's faltering growth revives cash vouchers talk
** Bank Indonesia to keep rates steady on Aug. 21, cut in Q4
For TOP NEWS across emerging markets nTOPEMRG
For CENTRAL EUROPE market report, see CEE/
For TURKISH market report, see .IS
For RUSSIAN market report, see RU/RUB
For GRAPHIC on emerging market FX performance in 2024 http://tmsnrt.rs/2egbfVh
For GRAPHIC on MSCI emerging index performance in 2024 https://tmsnrt.rs/2OusNdX
Reporting by Lisa Mattackal in Bengaluru; editing by Alan Barona
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