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Sticky inflation prompts EBRD to trim 2023 growth outlook
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Hang Seng rises after 4-day slump, other China stocks fall
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EM stocks up 0.6%, FX flat
By Shubham Batra and Bansari Mayur Kamdar Feb 16 (Reuters) - Stocks in emerging markets rose on Thursday after strong U.S. retail sales data soothed worries of an economic slowdown in the world's largest economy, while Hong Kong's Hang Seng index snapped a four-day losing streak. The MSCI's index of emerging market stocks gained 0.6%, tracking overnight gains on the Wall Street, after stronger-than-expected retail sales data offered evidence of resilience in the U.S. economy. "Broadly, for emerging markets, it's more of the global economy. If the U.S. keeps talking about the no landing scenario, that's sort of a net positive that should spill over to EM from a growth perspective," said Alex Loo, macro strategist at TD Securities. The Hang Seng index rallied 0.8% to close higher after a rough start to the week, while other China shares reversed early gains and closed lower. So far, the Hang Seng has declined 7.6% from the peaks of a recent rally on Jan. 27 as geopolitical tensions, fears of aggressive rate hikes in the U.S. and concerns about China's economy stymied the tech-heavy index. High gas prices and persistent inflation eroding real wages will limit growth in emerging Europe, central Asia and north Africa, the European Bank for Reconstruction and Development (EBRD) said in its regional economic outlook report. Growth for Turkey, the single biggest recipient of EBRD funds, was revised down to 3% from 3.5% for 2023. Turkey's lira hovered near a record low against the dollar as investor sentiment remained fragile, while Istanbul's bourse rose 2.7% on the second day of trading resumption. Trading was halted on Turkey's equity and derivatives markets last week following earthquakes that claimed more than 40,000 lives in the country and neighbouring Syria. Other regional currencies were flat at 0923 GMT as the dollar softened. Russia's rouble slipped against the greenback on lower foreign currency inflows from oil and gas exports and worries about a possible new round of EU sanctions against Moscow. South Africa's rand was flat in early trade. Hungary's forint fell 0.6%, leading losses among central and eastern European peers against the euro. Elsewhere in emerging markets, the Philippine peso rose 0.5% after the country's central bank hiked rates by a widely expected 50 basis points. Index provider MSCI said on Wednesday it will postpone implementation of updates to weightings for two of India's Adani Group companies, Adani Total Gas and Adani Transmission , to the May benchmark review. (Reporting by Shubham Batra and Bansari Mayur Kamdar in Bengaluru; Editing by Shounak Dasgupta)
