Emergingmarket stocks broke their longest winning streak since June on Thursday as concerns about spreading variants of the coronavirus gave investors an opportunity to cash in, while Turkeys lira was muted ahead of a central bank meeting.
MSCIs index of EM stocks fell 0.9 after gaining 4 over the last nine sessions, when optimism around vaccine rollouts and stimulus measures buoyed sentiment.
But many countries are seeing rising spreads of the UK, Brazil and South African variants, increasing fears of more lockdowns that would threaten reviving business activity.
Asia was a sea of red led by tech stocks, although the Shanghai composite and Taiwan shares outperformed. In South Africa, shares were set for their worst day in three weeks. Turkish and Russian shares managed to gain.
Turkeys lira was up 0.07. Policy makers are expected to keep the key interest rate at 17 though a minority expects a hike to 18. The decision is due at 1100 GMT.
The lira declined 20 last year, pushing inflation higher through imports denominated in hard currencies. Annual inflation climbed more than expected to some 15 last month, leading individuals to snatch up foreign currencies and gold.
Turkish inflation dynamics continue to be disastrous, said Tatha Ghose at Commerzbank, who predicts policy makers will hold.
Still, in Turkey, a different rationale works CBTs monetary policy has to be a much trickier balancing act. It also happens to be pandemic times, when even in other countries,…