Trade deal hopes buoy emerging stocks, FX

Emerging market stocks rose on Monday, with risk sentiment perkier on indications the United States and China are nearing a deal to put an end to their bruising trade war.

The Wall Street Journal reported that the two nations could reach a formal agreement by March 27, and that China would lower tariffs on U.S. imports including agricultural products, chemicals and cars in exchange for sanctions relief from Washington.

MSCI's index of emerging market shares rose 0.13 percent, with stocks in index heavyweight China driving gains.

"Progress towards a trade deal supports our overweight on global equities and our preference for offshore Chinese equities in Asia portfolios," strategists at the UBS Chief Investment Office said in a note.

Emerging markets were battered in 2018 as the tit-for-tat tariff war pushed investors to safer plays, sucking money out of riskier assets.

Hopes of a resolution helped Chinese blue-chips and the Shanghai Composite close more than 1 percent higher, while their more liquid peers in Hong Kong rose half a percent. The yuan tacked on 0.5 percent.

Zhang Yesui, spokesman for China's parliament on Monday reinforced the upbeat tone saying the "substantive progress" in trade talks China and United States have made has been "well-received" in both countries and around the world.

South African equities climbed 1.2 percent, while those in Turkey added 0.4 percent.

The lira fell after data showed annual inflation fell below 20 percent in February, for the first time since August. Some market participants now feel there will be intense pressure on the central bank to lower borrowing costs ahead of local elections later this month.

Russia's rouble firmed, on course to rise for the first time in five sessions, while the South African rand  weakened ahead of fourth quarter economic growth data scheduled to be out on Tuesday.

Credit Suisse Analyst Alexey Pogorelov expects real gross domestic product to have slowed to 1.8 percent, from 2.2 percent in the third quarter.

Romania's leu started the week 0.3 percent firmer against the euro.

On Friday, S&P Global Ratings gave Romania two weeks to appeal its credit rating outlook, time Bucharest said was needed to approve its budget and assess tax moves.

The country's Social Democrat government introduced a new banking tax alongside other levies on energy and telecom firms through an emergency decree in December, hitting investor sentiment.