Emerging market stocks fall for sixth straight session ahead of US rate hike

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 Emerging market stocks fall for sixth straight session ahead of US rate hike

June 9 - Emerging market stocks fell on Wednesday for a sixth straight session, which they were driven by tech heavyweights in Poland and Taiwan while currencies was lower with zloty nearing a six-month high ahead of a central bank decision.

Mainland China shares ended the day higher after data showed factory gate prices in May were of their fastest annual pace in over 12 years.

But MSCI's index of EM shares fell 0.3% as the stock in South Africa, Taiwan and South Korea fell between 0.3% and 1%.

On Thursday, the focus is on the United States inflation data to see if the economic rebound in the U.S. economy is moving at a pace that could stoke inflation and influence a change in the Federal Reserve's easy monetary policy stance next week.

While concerns about the market growth may have taken some wind out of the wind, investors should look at other offsetting tailwinds, said Mark Haefele, chief financial officer at UBS Global Wealth Management.

We expect the cyclical recovery momentum to persist in the second half of the year, albeit with some phases of volatility.

With US 10-year Treasury yields at their lowest level and the dollar flat, most emerging market currencies had unchanged or ticked slightly higher.

South Africa's rand rose 0.3%. It fell 11% on Tuesday after the GDP - data showed that economy slows as expected in the first quarter.

The Russia Ruble also rose 0.3% to a near 11 month high before an expected rate hike by the central bank on Friday.

Poland's central bank is expected to keep the status quo, though the market is watching more forward guidance amid rising inflation. The zloty climbed 0.2% against the euro, while other European central and eastern currencies held steady.

Even in case of a symbolic rate hike, the real interest rate will remain clear in negative territory over the coming quarters and will prevent a sustainable appreciation trend of the zloty medium-term, said Commerzbank EM FX analyst Antje Praefcke.

In Latam, the Peruvian socialist candidate Pedro Castillo held on to a narrow lead late on Tuesday in the country's runoff of its presidential election, as tensions racked up over contested ballots and accusations of fraud, sparking protests outside the elections office.

The sol held steady on Monday after significant drops on Tuesday.

For GRAPHIC on incoming market FX performance in 2021, see http: tmsnrt.rs 2 egbfVh For GRAPHIC on MSCI emerging index performance in 2021, see https: tmsnrt.rs 2 OusNdX

For RUSSIAN market report, see RUSSIA’s Market Report.

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