Stocks fall on Chinese tech losses, South African rand leads FX gains

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Emerging market stocks fell close to a one-year low on Monday, tracking losses in major Chinese technology stocks, while South Africa’s rand rose on early signs that the Omicron coronavirus variant may be causing largely mild infections.

The rand added 0.6% to the dollar, leading gains across Europe, the Middle East and Africa (EMEA) after anecdotal accounts suggested that Omicron may be causing less severe clinical symptoms than other coronavirus variants.

But doctors and experts cautioned that more research was needed before definitive conclusions could be drawn.

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Concerns over the new variant had spurred large swings in markets over the past week as investors feared more curbs on activity, while uncertainty over a hawkish Federal Reserve also weighed on sentiment.

MSCI’s index of emerging market (EM) stocks sank 0.7% on Monday to 1,215.86 points, just a few points above a one-year low of 1,208.54 touched last week.

China’s Baidu and Alibaba Group, which are among the largest EM stocks, sank more than 5.5% each after ride-hailing firm Didi Global Inc’s decision to delist from the New York Stock Exchange last week caused jitters over major Chinese stocks with U.S listings.

Didi’s move comes amid a sweeping crackdown by Chinese authorities on major tech firms this year. China’s securities regulator said on Sunday that Beijing’s recent policy moves were not aimed at specific industries or private firms, and were not necessarily linked to companies seeking to list in overseas markets.

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“China issues have not disappeared and despite reassuring words from various state organs regarding China company U.S. listing over the weekend, nerves surrounding China big-tech will continue,” Jeffrey Halley, senior market analyst at OANDA wrote in a note.

Internet giant Tencent, the third of the so-called “BATs” trio fell more than 3%, as steep tech losses in Wall Street also spilled over to broader markets.

Debt-ridden property developer, China Evergrande, plunged around 20% after it said there was “no guarantee” that it would have enough funds to meet debt repayments. China’s Guangdong province on Friday summoned Evergrande’s Chairman.

Most stocks in EMEA logged small moves. But Russian stocks fell more than 1% ahead of talks between Russian President Vladimir Putin and his U.S. counterpart Joe Biden on Tuesday.

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EM currencies were also flat, as investors awaited more clarity on the Omicron front, while keeping to safe havens such as the dollar and the yen.

Turkey’s lira was the worst performer in EMEA, sinking 0.3% in choppy trade as concerns over monetary policy showed no signs of easing.

For GRAPHIC on emerging market FX performance in 2021, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2021, see https://tmsnrt.rs/2OusNdX

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For CENTRAL EUROPE market report, see

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For RUSSIAN market report, see (Reporting by Ambar Warrick; Editing by Alex Richardson)