Stocks rise on China optimism ahead of c.bank decisions

Emerging market stocks rose on Friday over hopes that further easing of COVID curbs in China would boost economic activity and demand, while investors awaited a slew of central bank meetings next week.

While most emerging markets rose boosting the MSCI index EEFS by 1.0%, Indian SENSEX, NIFTY and Indonesian COMPOSITE indexes were outliers.

Indian shares lost almost 1% as tech stocks fell on spending cut worries, while Indonesia's top tech firm, PT GoTo Gojek Tokopedia GGOTO was among the biggest drags on the Jakarta Composite, down 7.0%, extending declines after the lockup period following its initial public offering opened in November. The stock has lost more than half its value since mid-November.

The broader EM stocks index is set to rise about half a percentage point this week, extending last week's gains.

Risk sentiment has risen since China eased more COVID restrictions amid unprecedented protests in the country. A slowdown in China's economy due to the curbs has rippled across the globe with investors fretting about falling demand.

Data on Friday showed factory-gate prices fell for a second month in November, indicating weak demand.

"The relaxation of the most stringent COVID-19 measures should support consumer demand, but it's unlikely we will see latent demand being unleashed in the same way as we saw in cash-rich Europe and the United States," said Stefan Koopman, senior macro strategist at Rabobank.

Next week, a slew of central bank meetings are scheduled with the U.S. Federal Reserve's decision being the most anticipated as investors wait to see if the Fed would opt for smaller increases following four 75 basis point hikes this year aimed at taming inflation.

Most currencies firmed against a steady dollar. China's yuan USDCNY rose 0.3%, hitting a three-month high, while South Korea's won USDKRW jumped 1.1%.

South Africa's rand USDZAR fell 0.2%, after five straight sessions of gains. It is up about 1.8% for the week following losses the week before on political uncertainty after allegations of misconduct were levelled against President Cyril Ramaphosa.

Central European currencies were mixed against the euro, with Hungary's forint EURHUF looking to recoup some of Thursday's steep losses, while Polish zloty (EURPPLN=) fell marginally.

In fixed income, hard currency spreads still showed some strain in the system, widening over the week.

Turkey's lira USDTRY was down 0.2% on the week. Fresh U.S. sanctions on a prominent Turkish business man, Sitki Ayan, could potentially add to pressure on the already strained relationship between Washington and Ankara.

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