Emerging Markets: After a three-day streak of gains, emerging market stocks dipped, weighed down by disappointing earnings that dragged the South Korean bourse lower, despite robust economic indicators. Meanwhile, Turkey's lira remained steady against the dollar.

Emerging market currencies remained largely unchanged, with the Philippine peso touching its lowest level since November 2022 against the dollar. However, Philippine Finance Minister Ralph Recto stated that the peso's weakness was unlikely to prompt a central bank rate hike.

Investor attention shifted to the Turkish central bank's upcoming interest rate decision, widely anticipated to maintain its key interest rate at 50 per cent, according to a Reuters poll. The lira remained relatively stable against the greenback.

Potential rate cut

Senior analyst Ipek Ozkardeskaya noted the consensus for a potential rate cut in the fourth quarter but highlighted concerns over persistent lira selloffs and global risks affecting last year's deflationary trend.

A strong dollar and apprehensions regarding sustained US interest rates have recently pressured emerging market currencies. Bank Indonesia's unexpected 25 basis point rate hike on Wednesday, coupled with Hungary's central bank cautiously signalling further easing, added to market uncertainties.

South Africa's rand gained ground against a softer dollar ahead of crucial producer price data.

The MSCI index for emerging market stocks slipped by 0.5 per cent, with technology shares declining globally following disappointing forecasts from Meta Platforms. Weaknesses in prominent chip and battery manufacturers SK Hynix and LG Energy Solution dragged down South Korea's KOSPI index by 1.8 per cent.

Despite South Korea's economy posting its fastest growth in over two years in the first quarter, doubts lingered regarding the sustainability of the recovery. Additionally, South Korea's financial market watchdog announced scrutiny of a new monitoring system aimed at detecting illegal short-selling before lifting a ban on such trades.

Meanwhile, mainland China and Hong Kong stocks edged higher, buoyed by improved sentiment, while Taiwan shares experienced a 1.4 per cent decline.

(with Reuters inputs)