Emerging market stocks slip as tech-heavy Asian markets retreat; currencies mixed after Fed pause
SPY•Emerging market stocks fell 0.9% as South Korean and Taiwanese shares dropped 1.2% and 1.4%, respectively, after Samsung Electronics fell 4%. Emerging market currencies were little changed after the Federal Reserve held rates steady.
1. Asian shares retreat
Emerging market stocks gave up some recent gains on Thursday, with technology-heavy Asian markets leading the decline. Samsung Electronics shares fell 4% after investors reacted to the lack of fresh shareholder-return plans and an outlook that lagged SK Hynix; South Korean shares fell 1.2% and Taiwanese shares slipped 1.4%. China's benchmark index lost 0.8%.
2. Fed holds rates
The Federal Reserve held interest rates steady on Wednesday, saying inflation “remains elevated.” The dollar steadied, while emerging market currencies traded little changed overall. ING FX strategist Francesco Pesole said a December rate hike remained in play, with 21 basis points priced in.
3. Currencies diverge
The South African rand weakened 0.3% as gold and platinum prices fell. Indonesia's rupiah rose 0.3% while Indonesian stocks dropped 3.5%; the country's 10-year bond yield held at its highest since May 2020. In Israel, the shekel and local stocks edged lower as Benjamin Netanyahu looked set to remain caretaker prime minister.
