By Sebastian Tong
LONDON, May 27 (Reuters) - Steadier commodity prices lifted emerging stocks to a week-high on Friday but Turkish shares tumbled over 2 percent after JPMorgan cut its investment weighting on the market.
Serbia's dinar was flat against the dollar after enjoying its biggest one-day gain in five months on Thursday following news of the capture of the last of the three men accused of instigating ethnic cleansing during the 1992-95 Bosnian war.
Investors were overall skittish as Greek lawmakers held crunch talks to avoid missing conditions for further international aid and signs emerged that the global economy was growing at a slower pace.
The cautious mood was also clouded by Fitch's ratings warning for Japan over its public finances.
'We are still very much in an uncertain situation in terms of the recovery, who is driving it and to what extent,' said Agata Urbanska, emerging markets economist at ING.
'There are more question marks than answers at every level whether it's China, Europe or the United States, whichever way you look there is heightened uncertainty,' she added.
Stronger commodity prices, however, helped push the key emerging equities index up 1 percent, on track for its first weekly gain in five weeks.
Emerging sovereign debt traded 6 basis points wider.
Russian shares leapt nearly 2 percent higher, boosting the rouble to its strongest against the dollar in a week.
South African shares were also among the biggest gainers, rising over 1 percent to two-week highs.
Emerging European bourses saw more modest gains though Polish shares advanced to their highest levels in over two weeks.
TURKEY, SERBIA
Failing to capitalise on broadly benign sentiment was Turkey which saw its key share index fall to 11-week lows after JPMorgan cut its weighting on the market on concerns over the country's deteriorating current account outlook, government policy and rising inflation.
The lira slid to a 12-week low against the dollar.
Also on the back foot was the Czech crown which languished at its lowest against the euro in over five months.
The Czech central bank governor dismissed analysts' suggestions that the currency had been affected by the euro zone debt crisis and said there was no need for coordinated response from central European policymakers.
Meanwhile, the dinar retreated from Thursday's four month highs against the euro, prompted by the arrest of Bosnian Serb wartime general Ratko Mladic.
Mladic's arrest is expected to clear the way for the Serbia to join the European Union.
'In terms of the dinar, we do not expect the central bank to allow further appreciation of dinar, which is already the best performing currency in the region with dinar appreciating over 9 percent since the beginning of the year,' said UniCredit analyst Dmitry Veselov in a research note.
An International Monetary Fund official said Serbia may seek some 1 billion euros as part of a new standby facility with the lender to replace one that expired last month.
(Additional reporting by Sujata Rao; editing by Toby Chopra) Keywords: MARKETS EMERGING (sebastian.tong@thomsonreuters.com; +44 20 7542 8561; Reuters Messaging: sebastian.tong.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LONDON, May 27 (Reuters) - Steadier commodity prices lifted emerging stocks to a week-high on Friday but Turkish shares tumbled over 2 percent after JPMorgan cut its investment weighting on the market.
Serbia's dinar was flat against the dollar after enjoying its biggest one-day gain in five months on Thursday following news of the capture of the last of the three men accused of instigating ethnic cleansing during the 1992-95 Bosnian war.
Investors were overall skittish as Greek lawmakers held crunch talks to avoid missing conditions for further international aid and signs emerged that the global economy was growing at a slower pace.
The cautious mood was also clouded by Fitch's ratings warning for Japan over its public finances.
'We are still very much in an uncertain situation in terms of the recovery, who is driving it and to what extent,' said Agata Urbanska, emerging markets economist at ING.
'There are more question marks than answers at every level whether it's China, Europe or the United States, whichever way you look there is heightened uncertainty,' she added.
Stronger commodity prices, however, helped push the key emerging equities index up 1 percent, on track for its first weekly gain in five weeks.
Emerging sovereign debt traded 6 basis points wider.
Russian shares leapt nearly 2 percent higher, boosting the rouble to its strongest against the dollar in a week.
South African shares were also among the biggest gainers, rising over 1 percent to two-week highs.
Emerging European bourses saw more modest gains though Polish shares advanced to their highest levels in over two weeks.
TURKEY, SERBIA
Failing to capitalise on broadly benign sentiment was Turkey which saw its key share index fall to 11-week lows after JPMorgan cut its weighting on the market on concerns over the country's deteriorating current account outlook, government policy and rising inflation.
The lira slid to a 12-week low against the dollar.
Also on the back foot was the Czech crown which languished at its lowest against the euro in over five months.
The Czech central bank governor dismissed analysts' suggestions that the currency had been affected by the euro zone debt crisis and said there was no need for coordinated response from central European policymakers.
Meanwhile, the dinar retreated from Thursday's four month highs against the euro, prompted by the arrest of Bosnian Serb wartime general Ratko Mladic.
Mladic's arrest is expected to clear the way for the Serbia to join the European Union.
'In terms of the dinar, we do not expect the central bank to allow further appreciation of dinar, which is already the best performing currency in the region with dinar appreciating over 9 percent since the beginning of the year,' said UniCredit analyst Dmitry Veselov in a research note.
An International Monetary Fund official said Serbia may seek some 1 billion euros as part of a new standby facility with the lender to replace one that expired last month.
(Additional reporting by Sujata Rao; editing by Toby Chopra) Keywords: MARKETS EMERGING (sebastian.tong@thomsonreuters.com; +44 20 7542 8561; Reuters Messaging: sebastian.tong.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2011 AFX News
