LONDON: Emerging market stocks rose for the first time in four days on Friday as signals from China that it is readying another dose of economic medicine put the asset class of course for a modest weekly gain.
MSCI's 23-country emerging market index was up 1 percent in Europe as a G20 gathering of world finance leaders in Shanghai provided a welter of reassuring comments, although little in the way of actual policy stimulus.
The standout message was from China's central bank chief, Zhou Xiaochuan, who said Beijing still had the room and tools to support the world's second largest economy and crucially that it was not looking to push down the yuan.
"It is key for them (China) to convince the market that they are not going to enter into a currency war," said head of emerging market research at Credit Agricole, Sebastien Barbe.
"The meeting is in China and they really want to make it clear that they will play an active role in the stabilisation (of markets)."
Meanwhile, South Africa's rand, which took a drubbing earlier in the week after its budget failed to dispel concerns about its investment grade credit rating, started to wilt again as political tension bubbled and the dollar found some traction.
The rand was last down 0.3 percent at 15.6785 to the dollar and not far from the 15.7645/dlr it had tumbled 3 percent to on Wednesday.
Eyes were also on Venezuela, one of the countries hardest hit by the slump in oil prices, ahead of a $1.5 billion bond repayment later.
Government sources told Reuters earlier in the week that it had the money to pay there are major concerns that even if it makes this payment, its finances are so dire that it will default later in the year when bigger bills are due.
Of about $10 billion debt due throughout 2016, more than $4 billion, mainly of state oil company PDVSA, must be paid in October and November. Credit default swaps show traders see a more than 70 percent chance of default in the next year.
President Nicolas Maduro says Venezuela will pay despite an "economic war" against him.
The weekly batch of investment flow data also made difficult reading.
Emerging market funds saw their 17th straight week of outflows with Chinese, Greek and Taiwanese stocks hit hardest according to Morgan Stanley, although the scale of withdraws did drop and EM bond funds saw marginal inflows.
Back in the live markets, eastern European and Russia stocks continued their hot streak with the pan-regional MSCI index hitting its highest since the first trading day of 2014.
For standalone Russian indexes it was even longer. A 1 percent jump on the day took the rouble-denominated MICEX to its best level since November and the dollar-based IRTS jumped 2.7 percent. Romanian stocks saw their second consecutive weekly rise of more than 3 percent.
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