Dec 1, Reuters -- A gauge for emerging market stocks increased more than 1% on Wednesday, as worries about the Omicron variant showed signs of ebbing, while Turkey's lira grew after a tumultuous month.
After the detection of the new coronaviruses, the MSCI's index for developing world equities increased by 1.3%, as it led to widespread doubts about whether COVID 19 vaccines are effective against Omicron, and led to fears that governments will impose restrictions on consumer and business activity.
Markets in Asia traded higher as traders took comfort in improving data, with South Korean exports growing at their fastest pace in three months in November.
Turkish stocks rose by 2.2% to lead gains among peers in the region of Europe, Middle East and Africa after data showed factory activity grew in November, with new export orders and output rising.
The output price went to their fastest pace on record, despite the weakness of the lira, according to the survey.
The lira rose 0.6% against the dollar, on track to break a three-day losing streak after clocking its worst month in twenty years. The currency had sunk to record lows in November, despite the soaring inflation and widespread criticism by President Tayyip Erdogan.
There is evidence that the depreciation of the lira has strengthened the contribution of net exports to growth through, inter alia, promoting import substitution, said Citi economists Ilker Domac and Gultekin Isiklar.
A repeat of this year is hard to achieve against the backdrop of subdued consumer confidence, a decline in purchasing power, soft labor market conditions and elevated FX volatility. The South African randAfrican rand rose by 0.4% for the third day, extending a recovery from last week's plunge on risk appetite, while Russia's rouble strengthened with oil prices as major producers prepared to discuss how to respond to the threat to fuel demand from the Omicron variant.
Poland's zloty increased by 0.2% against the euro, leading gains among central and eastern Europeans after data showed that the manufacturing sector posted firmer growth in November than in the previous month.