(Bloomberg) — Emerging-market equities snapped its six-day advance amid investor skepticism about China’s plans for more stimulus to support the economy.
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The MSCI emerging stock index dropped 0.2%, dragged down by Taiwan Semiconductor Manufacturing Company Ltd. While China’s top leaders signaled bolder economic support next year with a pledge to embrace a “moderately loose” monetary policy, fresh trade data again pointed at a weak domestic demand, according to Elias Haddad, a strategist at Brown Brothers Harriman.
“China cannot rely on exports to sustain a recovery in economic activity and needs to stimulate consumer spending,” he said in a note.
In South Korea, the Kospi Index closed up 2.4%, rebounding from the brink of bear market territory. The won stabilized against the dollar as officials reiterated their readiness to respond to market volatility.
Developing currencies were mixed. The South African rand underperformed peers with a 0.5% decline against the greenback.
In Latin America, investors will watch out for more news about Brasil’s President Luiz Inacio Lula da Silva’s health condition. He underwent an emergency brain surgery and remained in intensive care.
Meanwhile, the Polish zloty weakened for the first time in five days against the euro as policymakers argued over the right timing of interest rate cuts.
Faster-than-expected Hungarian inflation data added further support to the forint. The currency is headed for the strongest close against the euro in two weeks.
“The currency has put the worst behind it,” said ING Bank NV strategist Frantisek Taborsky. “Hungarian government bonds have seen new inflows in recent days.”
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