EMStocks Hit 3Week Lows Led by HK Shares

Feb 24 Reuters Emerging market shares slid to threeweek lows on Wednesday, led by 3 drop in Hong Kong shares, while South Africas rand slipped ahead of a budget speech later in the day.

In line with stocks across the globe, an index of developing market shares slipped 1.3 as heavyweight mainland China shares fell around 2.

Hong Kongs Hang Seng index posted its worst session in nine months as exchange operator HKEX sank after the city, a global financial hub, announced it would increase the stamp duty on stock trading.

As U.S. Treasury yields stayed near recent highs, and concerns about a future trend higher in inflation weighed, risk assets were moved to the back burner.

South Africas rand fell 0.4 with investors eyeing Finance Minister Tito Mbowenis budget speech at 1200 GMT. Analysts do not see the budget offering any significant fiscal consolidation beyond what was announced by President Cyril Ramaphosa recently, with any surprises expected to be positive.

A Reuters poll had shown South Africas fiscal deficit narrowing this year because of an economic rebound, but the longterm trend of higher debt remains unchanged due to the COVID19 pandemic.

The fiscal risks will continue to put pressure on the rand and entail downside risks for the rand in particular in case of rising risk aversion, said Commerzbanks FX and EM analyst Elisabeth Andreae.

Turkeys lira reversed early losses to slip 0.2 against the dollar to threeweek lows. That was after the central bank said…

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