* Most EM stocks rise, except for Turkey
* Markets see U.S. stimulus package as done deal -analyst
* Czech central bank likely to hold rates in policy meeting
By Shreyashi Sanyal
Aug 6 (Reuters) – Emerging market stocks rose for the third straight session on Thursday, as investors remained hopeful of a coronavirus relief bill to be passed in the U.S. Congress, while the Czech central bank’s decision on key lending rates remained in focus.
The MSCI’s index for developing world stocks rose 0.4%, with investors focussing on offshore developments, including negotiations around a new coronavirus relief legislation in the United States heading towards an end-of-week deadline.
“Fiscal stimulus that supported the economy during the first half of the year is wearing off and it’s unclear whether Congress will be able to provide more fiscal support, but for now markets continue to price that another stimulus package is a done deal,” said Charlie Ripley, senior investment strategist at Allianz Investment Management, Minneapolis.
Most bourses opened higher in emerging markets across Europe, Middle East and Africa with gains between 0.4% and 0.5%. Turkish stocks were among the few decliners on the day, falling 0.2%.
Istanbul shares have underperformed against peers since late last month, along with the lira, on doubts over the country’s ability to stave off another currency crisis. Analysts predicted state efforts to stabilize the currency could fizzle, making the lira among the only emerging market currencies to not benefit from a recent weakness in the U.S. dollar.
Also on the radar was the Czech koruna, which was flat against the euro ahead of the Czech National Bank monetary policy decision at 1230 GMT.
Markets expect the central bank to leave its base interest rate at 0.25%. Analysts polled by Reuters mostly expect rates to stay unchanged the rest of 2020 and through 2021.
Other central and eastern European currencies, including Hungary, Poland and Romania, were rangebound against the euro.
A Reuters poll showed most central European currencies will firm over the next 12 months, buoyed by improved risk sentiment as investors shrug off worries about a rise in coronavirus cases and focus on hopes of economic recovery.
South Africa’s rand fell, while the Russian rouble was flat. Investors in Russia also awaited inflation data later in the day.
For GRAPHIC on emerging market FX performance in 2020, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2020, see tmsnrt.rs/2OusNdX
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