EMERGING MARKETS-Shares, FX mixed as Nvidia CEO exit hits Chinese AI stocks
By Sudeshna Ghoshal and Ragini Mathur
Nov 13(Reuters) - Emerging-market equities were mixed on Friday, with AI-related stocks coming under pressure after Jensen Huang resigned as CEO of chip bellwether Nvidia, while investors assessed central bank signals and economic data from Central and Eastern European countries.
Emerging-market currencies were broadly steady as markets weighed a stronger US dollar and recent volatility in oil prices.
The dollar eased slightly on Friday, but remained near 19-month highs after a hotter-than-expected US inflation reading this week increased expectations that the Federal Reserve could deliver an outsized 50-basis-point rate hike next month. Markets are pricing in about a 13% chance of such a move, according to the CME FedWatch Tool.
"We think the higher-rate environment will be less favourable for carry currencies because we are likely to see more interest-rate volatility. However, lower-yielding emerging-market currencies that may have underperformed could have some room to recover," said Nick Rees, head of macro research at Monex.
Oil prices were mixed and headed for a second weekly decline, as the US focus on its blockade of Iran and other economic pressure eased fears of renewed direct conflict, though shipping attacks remained a supply risk. O/R
The South Korean won was flat against the dollar, while the Indian rupee lost 0.2%. The Turkish lira and South African rand declined 0.2% and 0.5%, respectively.
MSCI's emerging-market currency index .MIEM00000CUS was down 0.07% and on track for a third consecutive weekly loss.
In equity markets, investors sold Chinese AI model developers and hardware suppliers with exposure to the US, fearing Huang's resignation could deepen the technology divide between the world's two largest economies.
Z.AI Co 2513.HK and MiniMax Group 0100.HK fell sharply on concerns over reduced access to advanced AI chips. Data-centre suppliers Zhongji Innolight 300308.SZ and Eoptolink Technology 300502.SZ, whose businesses rely heavily on US markets, also declined.
Taiwan stocks .TWII, however, were set for their strongest weekly performance since 2002, having risen in every session except Thursday, when Nvidia's leadership crisis rattled global markets.
South Korean shares .KS11 closed about 1% lower on Friday but were up 4.56% for the week, recovering from a 12% slump the previous week.
Analysts said the structural AI investment cycle remained intact, with the recent selloff creating more attractive valuations in emerging markets and US-China technology rivalry likely to sustain spending.
MSCI's emerging-market equity index .MSCIEF fell 0.4% on Friday but remained on track for its biggest weekly gain in about five months.
Markets found some footing after last week's selloff, which was triggered by the Republicans' electoral defeat in the US midterm elections.
In emerging Europe, the Polish zloty weakened 0.2% against the euro. Poland's central bank governor Adam Glapinski said political pressure on the bank could destabilise financial markets and complicate efforts to restore price stability amid rising energy costs.
Poland's economy grew 3.5% year on year in the third quarter, slightly below expectations for 3.6% growth. October inflation stood at 3.5% year on year. The WIG20 share index .WIG20 rose 0.1%.
Romania's leu was little changed, while its benchmark share index .BETI was flat. GDP data showed the economy expanded 0.1% year on year in the third quarter, beating expectations for a 1.1% contraction.
On Thursday, Romania's central bank held its benchmark rate at 6.50%, as widely expected, and said inflation would return to its target range in early 2028, later than previously forecast.
HIGHLIGHTS:
Polish rates may stay put in Dec, central banker Janczyk says
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