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EMEA Stocks Outperform Asia; Turkish Equities at Record High

Turkish stocks hit a record high and Russian equities rose to a 212 month peak on Wednesday as optimism over a coronavirus vaccine saw sustained buying of riskdriven assets, particularly stocks.

Most emerging market currencies in Europe, the Middle East and Africa also ticked higher, with Turkeys lira adding as much as 1 after a regulator relaxed bank limits on swaps and other transactions to support the currency.

The countrys current account deficit also narrowed more than expected in September, indicating some economic respite from the impact of the coronavirus.

But concerns over Turkish central bank independence, after the abrupt replacement of the governor, as well as dwindling foreign exchange reserves and spiking inflation dulled the outlook for Turkish assets.

Still, Turkish stocks rose 0.8 to a record high. Most other EMEA stock markets rose between 0.2 to 1.2, outperforming a 0.3 drop in the MSCIs index of emerging market stocks as major Asian bourses retreated.

In general, the developed world is better placed than EM for securing vaccine supply this may mean that in parts of the emerging world, the cycle takes longer to normalise, said John Lomax, head of global emerging markets equity strategy, HSBC.

Analysts also noted that economic ructions from the pandemic would persist during the time taken to develop and distribute the vaccine, which would likely result in increased volatility in the near term for riskdriven markets.

Even if the future looks…

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