HITS- 2 YEAR HIGH AS DOLLAR INFLOWS INTENSIFY
Emerging stocks hit 2-year high; Qatar pressures increase (COMPO)
LONDON, June 9 (Reuters) - Emerging stocks inched to new two-year highs on Friday and were set to end the week in the black, but Qatar's riyal fell further in the offshore forwards markets after a rollercoaster week that saw its stocks lose 7 percent.
Overall emerging markets were kept in check by a firmer dollar and weaker Chinese factory gate prices that again cast doubts on economic growth, but MSCI's emerging equity index rose 0.2 percent for a 0.6 percent increase this week.
Qatari stocks stabilised on Thursday after sharp falls, but pressure on its currency and bonds showed little sign of abating, with one-year dollar/riyal forwards hitting the lowest since December 2015 in offshore trade.
The riyal has traded as low as 3.7 per dollar in onshore forwards markets, Thomson Reuters data shows, a record low, and some 1.6 percent below its spot pegged rate.
"There is a bit of a spike but Qatar has plenty of reserves to fight the attack on the currency, so we don't think a de-peg is on the cards," Societe Generale strategist Regis Chatellier said. He ruled out defaults despite pressure on Qatari bonds.
Sovereign credit default swaps (CDS) also rose to a new seven-month high of 101 basis points (bps), almost double week-ago levels, according to IHS Markit.
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