LONDON, March 6 (Reuters) - Emerging market stocks rose to
two-week highs on Wednesday, lifted by gains in China and fresh
signs of a U.S. economic uptick, which spurred Wall Street to a
record close the previous day.
The Kenyan shilling fell 1 percent on concerns about a delay
in issuing the results of a closely fought presidential
election, while investors were also watching for any fallout in
the Venezuelan market from the death of President Hugo Chavez.
The main emerging markets index rose 0.6 percent
to move back into positive territory for the year.
Chinese stocks, the biggest component in the emerging index,
rose for a second day, benefiting from policy
announcements by China's parliament.
"China confirmed plans to widen its budget deficit, boosting
hopes for improved economic performance this year," Credit
Agricole analysts said in a note, referring to China's plans for
record public spending in 2013.
On Tuesday, data showing a pickup in the U.S. service sector
pushed the Dow Jones Industrial Average to a record
close, while European stocks hit 4-1/2 year highs on
The Kenyan shilling, which rallied to November 2012 highs
after Monday elections passed relatively smoothly, fell back on
concerns that delays in announcing the result could prompt
rivals to challenge the outcome.
Post-election violence in 2008 killed over 1,200 people.
Political instability was also feared in Venezuela after the
death on Tuesday of Chavez, who ruled the country for 14 years.
Venezuelan bonds, which have been among the best performing
emerging dollar assets this year with gains of over 4 percent,
were little changed. Yield spreads over Treasuries tightened 4
basis points to 731 bps.
The 2027 bond fell 0.370 cents on the dollar,
while credit default swaps were little changed around 639 bps,
according to Markit, well off multi-year lows hit in January.
In central Europe, the Hungarian forint slipped
0.57 percent to 299.36 per euro, close to five-week lows hit on
Tuesday. The currency, facing a key technical barrier before it
breaches 300 per euro, is being rattled by uncertainty over the
course of monetary policy under the central bank's new governor.
The zloty slipped 0.10 percent before a central
bank meeting, which is expected to result in a cut in interest
rates of 25 basis points.