MSCI’s index tracking bourses in developing economies edged up 0.2%, but was set for its fourth-straight week in the red.
An index tracking currencies was flat, although it was set to eke out gains of 0.1%, after four-straight weeks in declines. Attention was on a key US jobs figure later on Friday that could determine the Federal Reserve’s rate decision next week.
However, the broader indecisiveness was due to the US 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 and Hong Kong 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 dipped in thin volumes, India’s rupee and Turkey’s lira traded in a tight range, while South Africa’s rand weakened 0.3%.
Georgia’s lari firmed 0.4% after US 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 US pollster to call into question the official results.
In Africa, Botswana’s pula edged up 0.4%, and three-year benchmark bond’s 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 slipped 18 cents on the dollar. A day earlier the presidency said it plans to buy back 50% of its US$600 million Eurobond, to restore investor confidence after a political transition.
Later on Friday, S&P is expected to review its credit rating on Turkey, and Fitch’s review on Egypt is also due.