Stocks, FX flat as investors weigh geopolitical tensions, US elections

Reuters

Stocks, FX flat as investors weigh geopolitical tensions, US elections

2024 11월 1 일, 오전 9:27 GMT

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Updated at 0906 GMT

China housing, manufacturing activity improves in October

U.S. pollster says questions Georgia election results

Botswana's ruling party loses election

MSCI EM stocks index up 0.2%, FX flat

By Johann M Cherian

Nov 1 (Reuters) -Currencies and stocks of most emerging markets traded in a tight range on Friday, with investors avoiding large bets as uncertainty around geopolitical tensions and the U.S. election dominated the mood.

MSCI's index tracking bourses in developing economies .MSCIEF edged up 0.2%, but was set for its fourth-straight week in the red.

An index tracking currencies .MIEM00000CUS was flat, although it was set to eke out gains of 0.1%, after four-straight weeks in declines. Attention was on a key U.S. jobs figure later on Friday that could determine the Federal Reserve's rate decision next week.

However, the broader indecisiveness was due to the U.S. presidential election on Nov. 5. Some investors have increasingly bet that Republican candidate Donald Trump will win although he is still neck and neck with Democratic Vice President Kamala Harris in several polls.

Trump's proposed policies are widely seen by analysts as inflationary, and those on tariffs are expected to hurt some developing economies.

Meanwhile, real estate-related sectors in China .CSI000952 and Hong Kong .HSMPI got a lift after separate surveys showed improving housing activity and manufacturing activity in October, raising expectations that recent stimulus measures were taking effect.

"At first glance, this seems surprising, given that the political leadership was only discussing an additional fiscal package at the end of September. However, if we look at the budget and bond issuance data, it is clear that much stronger support for the economy had already begun in September," Volkmar Baur, FX analyst at Commerzbank, said in a note.

Prices of crude oil, an important resource for developing economies, rose over 2% after a report suggested Iran was preparing to launch a retaliatory strike on Israel from Iraq in the coming days.

Currencies of net importers Philippines PHP= dipped in thin volumes, India's rupee INR=IN and Turkey's lira TRYTOM=D3 traded in a tight range, while South Africa's rand ZAR= weakened 0.3%.

Georgia's lari GEL= firmed 0.4%. after U.S. data and polling firm Edison Research said differences between its exit poll and the official results of last weekend's parliamentary election pointed to "manipulation" of the vote. It was the second U.S. pollster to call into question the official results.

In Africa, Botswana's pula BWP= edged up 0.4%, and three-year benchmark bond's BW3YT=RR prices inched up, after President Mokgweetsi Masisi's party lost parliamentary majority, ending nearly six decades in power.

Gabon's hard currency bond maturing in 2025 US362420AC51=TE slipped 18 cents on the dollar. A day earlier the presidency said it plans to buy back 50% of its $600 million Eurobond, to restore investor confidence after a political transition.

Later on Friday, S&P is expected to review its redit rating on Turkey, and Fitch's review on Egypt is also due.

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 Johann M Cherian in Bengaluru, Editing by Timothy Heritage

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