EMERGING MARKETS – Stocks and exchange rate slide as China’s tightening of power exacerbates slowdown fears


* China and Hong Kong stocks rise as tech and real estate stocks recover

* MSCI EMFX, the equity index both fall by 0.2%

* Russian ruble is sluggish, up 0.5%

* BlackRock slightly overweight Chinese equities (adds BlackRock, S&P EM outlook)

Sept. 28 (Reuters) – New evidence of slowing growth in China amid an electricity shortage and rising U.S. Treasury yields further rattled fragile risk sentiment on Tuesday, though a rally in tech and real estate stocks supported heavy Chinese stocks.

Profit growth for Chinese industrial companies has slowed for a sixth month, data showed Tuesday as factories battled high commodity prices, COVID-19 outbreaks and parts shortages.

An electricity crisis unfolding in the world’s second-largest economy has worsened over investor concerns over the fate of ailing real estate developer Evergrande.

The MSCI Emerging Currency Index headed for its worst session in three weeks, as stocks fell 0.2%, sharp declines in the rest of Asia, South Africa and the rest of South Africa. Turkey outweighing the gains in China.

“It is still not clear … whether the electricity crisis in China is easily ‘fixable’ or reversible, but in the meantime it is generating more concerns about the global supply chain,” he said. said Natalia Gurushina, EM bond economist at VanEck.

Rating agency S&P on Monday lowered the 2021 annual GDP growth forecast for the Asia-Pacific region to 6.7% from 7.1%. For emerging markets at large, excluding India and China, S&P raised its forecast to 4.8% from 4.6% previously.

But the Chinese central bank’s liquidity injections and promises to protect consumers exposed to the real estate market pushed up domestic real estate stocks on Tuesday.

Shares of big tech names such as Alibaba, Tencent and Meituan, which recently saw sharp declines thanks to tighter regulations, have also rallied.

BlackRock is dipping a toe into Chinese equities on stimulus hopes, the asset manager said in a client note, adding that it is also slightly overweight emerging debt. nL8N2QU1PT]

While a dollar lifted by rising Treasury yields put pressure on most emerging market currencies, the Russian ruble strengthened 0.5% as oil prices rose.

Analysts also point to parliamentary elections which showed the ruling party to retain a majority, albeit small. “Policy continuity is widely expected on all fronts. The situation supports our expectation of a slight appreciation of the ruble exchange rate in the next quarter, ”analysts at Commerzbank said.

The Turkish lira was dangerously close to all-time lows, while the South African rand remained at a one-month low, falling around 0.6%.

In Tunisia, the dinar extended losses to a fourth consecutive session as the political crisis in the country, following President Kais Saied’s takeover, threatened to worsen economic unrest.

For the CHART on the performance of emerging market currencies in 2021, see tmsnrt.rs/2egbfVh For the CHART on the performance of the MSCI emerging index in 2021, see tmsnrt.rs/2OusNdX

For TOP NEWS in emerging markets

For the CENTRAL EUROPE market report, see

For the TURKISH market report, see

For the report on the RUSSIAN market, see

Reporting by Susan Mathew in Bangalore; Edited by Giles Elgood and Ramakrishnan M.

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