EM stocks up 0.1%, FX flat
India stocks outperform on proposed tax cuts
Romanian stocks fall on austerity worries
S.Korea shares fall on US tariff plan reports
Aug 18 (Reuters) – Most emerging market currencies were steady on Monday, as markets awaited developments from Ukraine talks in Washington, while Indian stocks sprinted ahead on government proposals for a major tax overhaul.
Romanian equities underperformed with a 1.5% drop, on track for their biggest fall in over a month, as investors fretted about impending austerity measures to cut the country’s hefty budget deficit.
Fitch maintained Romania’s “BBB-” rating – an investment-grade credit status on Friday, easing bond market jitters about the rating being downgraded to junk status. Equity investors, however, focused on the likely hit to growth from further tax hikes and spending cuts.
Polish stocks slipped 0.1% while a broader gauge tracking central and eastern European equities fell 0.5% .
Activity in currency markets was subdued as traders looked to Washington, where Ukraine’s President Volodymyr Zelenskiy was set to meet European leaders and U.S. President Donald Trump later in the day.
The talks aim to chart a peace deal, even as concerns swirl over pressure on Kyiv to accept Russia-leaning terms.
“We think any negotiation process will be drawn out given the lack of trust and distance between desired outcomes, and any agreements will likely be treated with suspicion,” UBS analysts said.
This round follows Friday’s Alaska meeting between Russia’s Vladimir Putin and Trump, a session markets didn’t expect to move the needle. Trump, however, said a deal should be made to end the 42-month-long war.
Ukraine’s international dollar bonds lost steam, with all long-dated maturities down marginally.
Movement in emerging European markets has been largely range-bound in recent days, as investors have focused on the prospect of a breakthrough in the Russia-Ukraine war, as well as the outlook for U.S. interest rates after a batch of mixed data.
The major economic event of the week will be the Kansas City Federal Reserve’s August 21-23 Jackson Hole symposium, where Fed Chair Jerome Powell is due to speak on the economic outlook and the central bank’s policy framework.
Elsewhere, Indian stocks, jumped more than 1%, while the rupee rose 0.2% after the government proposed sweeping changes to the goods and services tax regime, which will make daily essentials and electronics cheaper from October.
South Korean shares dropped 1.5%, dragged down by chip stocks following reports that Trump will unveil tariffs on semiconductor imports in the coming weeks.
Chinese equities rose, with the Shanghai Composite Index touching its highest levels since 2015, while the blue-chip index jumped nearly 1%.
Stock markets in Singapore and Thailand shed 0.9% and 1.1%, respectively.
** Bolivia’s left in historic defeat as presidential vote set for October runoff
** Indonesia unveils 2026 budget with lower deficit, targets fiscal balance within three years
** Thailand’s Q2 growth beats forecast but faces slowdown in H2 on tariffs
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For CENTRAL EUROPE market report, see
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For RUSSIAN market report, see (Reporting by Pranav Kashyap in Bangalore Editing by Christina Fincher)
