LONDON: Emerging stocks were on track for a solid weekly rise on Friday, though currency markets were jittery ahead of US jobs data with inflation fears rattling Turkey's lira.
MSCI's emerging market index edged higher on the day and looked to add 1.6 percent over the week thanks to solid gains in Asia, where bourses traded within sight of their recent decade highs and Seoul stocks closed at a fresh record high.
The daily gains came after investors guardedly welcomed plans for a massive US tax cut and took some comfort from President Donald Trump tapping Fed Governor Jerome Powell to become head of the US central bank, signalling a continuation of Janet Yellen's cautious monetary policies.
"(Emerging stocks) are really being driven by G7 equities and that in turn is being driven by the tax cut expectations from the US," said Simon Quijano-Evans, emerging markets strategist at Legal & General Investment Management.
However, losses in Chinese mainland stocks tempered gains, with Shanghai on track to post the worst week since August on heightened worries over an economic slowdown.
Despite the dollar treading water, currencies suffered as gains in key US employment data due later in the day could seal the case for the Federal Reserve to raise interest rates in December.
Turkey's lira racked up some of the biggest losses after data showed inflation spiked by more than expected with annual price increases hitting a nine-year high of 11.9 percent, adding to the central bank's quandary.
The lira weakened 0.8 percent against the dollar, flirting again with the 10-month low hit last week, and on track for a 1 percent fall since Monday in its eighth straight week of losses.
Spreads of Turkish local government benchmark debt over US Treasuries rose to their widest since 2011.
"Given that inflation is surprising everybody on the upside, the expectation is that it's not positive for the lira until we get some sort of policy reaction or message from the monetary authorities," Quijano-Evans said, adding that other higher beta currencies such as the rand were also getting hit.
South Africa's rand weakened 0.6 percent on the day, on track to end the week lower as data showed private sector activity shrank again with both output and new orders falling.
Despite higher oil prices, Russia's rouble eased 0.6 percent on the day as data showed the service sector growing at the lowest pace in three months and companies faced debt repayments in the fourth quarter. Both the rand and rouble are in their third straight week in the red.
Meanwhile, Venezuela announced late on Thursday plans to restructure "all future payments" on its burgeoning foreign debt, a move that may lead to a default by the cash-strapped OPEC nation whose collapsing socialist economy has left its population struggling to find food and medicine.
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