EMERGING MARKETS-Stocks slip as tech-heavy Asian markets retreat; FX mixed after Fed pause
By Sudeshna Ghoshal and Ragini Mathur
Oct 29(Reuters) - Emerging market stocks gave up some of their recent gains on Thursday, dragged down by the tech-heavy Asian benchmarks, while currencies traded mixed as investors digested the US Federal Reserve's widely expected pause.
Samsung Electronics 005930.KS shares fell 4% as investors balked at a lack of fresh shareholder-return plans and an outlook that lagged rival SK Hynix's 000660.KS. That weighed on South Korean equities .KS11, which were down 1.2%, and on Taiwanese stocks .TWII, which slipped 1.4%.
Both markets have posted eye-popping gains since 2025, but renewed doubts about whether heavy AI spending will pay off have kept the rally in check.
China's benchmark index .SSEC lost 0.8%.
MSCI's global EM equity index .MSCIEF was down 0.9%, while the currency index .MIEM00000CUS traded little changed.
The Federal Reserve held interest rates steady on Wednesday, opting to delay any changes to borrowing costs until after next week's US midterm elections while it awaits further data on inflation, which the central bank said "remains elevated."
The dollar steadied on Thursday.
"The picture for the dollar doesn’t change after this Fed meeting. A December hike remains in play (21bp priced in)," said Francesco Pesole, FX strategist at ING.
"We see limited room for bearish follow-through to yesterday’s mild negative USD reaction on the Fed story alone. If anything, some positioning for a softer USD could emerge ahead of next week’s US midterms."
Oil prices pared gains made in the prior session. O/R
Currencies of net oil importers were mixed, with India's rupee muted, the Philippine peso up 0.2% and Thai baht slipping 0.2% against the dollar.
The South African rand weakened 0.3% as declines in gold and platinum prices weighed on the commodity-linked currency, while investors looked ahead to local producer inflation data due later in the day.
In Indonesia, the rupiah rose 0.3% as its benchmark 10-year bond yield held at the highest since May 2020, driven by elevated oil prices and concerns over MSCI's proposed review of the country's market status. Indonesian stocks .JKSE were down 3.5%.
Elevated bond yields likely helped the rupiah pull away from record lows it approached earlier this week.
Israel's shekel and local stocks fell marginally as Benjamin Netanyahu looked set to remain caretaker prime minister and after coming under pressure on Wednesday. Unexpectedly strong backing among Jewish voters left his opponents with little apparent prospect of unseating him, even though his right-wing bloc lost its parliamentary majority.
Final results are expected on Thursday.
In emerging Europe, most stock benchmarks traded higher. Polish equities .WIG gained 0.3% and Romanian stocks .BETI rose 0.2%.
Central European currencies remained under pressure from energy costs. Hungary's forint was down 0.3% against the euro, as investors waited for the ECB's rate decision.
Markets in Turkey were closed for a public holiday.
HIGHLIGHTS:
** Bank of Korea board member says won moves faster than expected
** South Africa risks return to money-laundering grey list
** Thai central bank chief says growth too low, focus on supporting economy
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For CENTRAL EUROPE market report, see CEE/