EMERGING MARKETS-EM stocks tick higher; CEE subdued in data-heavy week

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EM stocks up 0.7%, FX flat

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Turkish industrial production drops 2.1% in December

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Hungary's forint slips from over 2-year peak

By Pranav Kashyap

(Reuters) -

Most central and eastern European currencies held their ground on Tuesday, while regional stocks were mixed as investors braced for a data-heavy week.

MSCI's index tracking global EM stocks rose 0.7% and was up for a second straight session to ?hit a more than one-week high, while a similar gauge for currencies was flat.

Hungary's forint briefly notched its strongest level in more than two years ?before falling 0.4%. After hovering near two-year highs in recent sessions, the currency could face fresh headwinds if ?January inflation data, due Thursday, comes in sharply lower. A softer inflation ?print would only strengthen the case ?for renewed rate cuts, potentially taking some wind out of the forint's uptick.

Investors will get further insights on the central bank's thinking when ?minutes from its January meeting land on Wednesday. Adding to ?the backdrop, Hungary is also heading toward a national election in early April.

Budapest shares were flat, while Warsaw equities rose 0.2%.

The Polish zloty, one of the region's laggards ?so far this year, slipped from a more than ?one-week high notched ?in the prior session as traders positioned ahead of the release of the country's inflation data later this week.

Regional equities have started the year on a strong note, with Hungary up 17%, ?Romania up 12.3% and Poland up 7.6%.

That easily outpaces the U.S. S&P 500's roughly 0.5% rise, highlighting a rotation that analysts say still has room to grow as investors trim exposure to pricey U.S. tech and hunt for value in overlooked corners of the market.

"There are several reasons to like EM equities right now. We put the most weight on the potential for further dollar weakness, accelerating earnings, and exposure to ?the global ?AI supply chain," LPL Financial analysts said.

"In 2026, EM earnings are expected to grow 29%, more than double current earnings growth expectations for the U.S. at 14%. EM valuations remain compelling."

Turkish stocks, ?which are up nearly 23% year-to-date, were down 0.14%. The central bank is expected to revise its 2026 inflation forecasts higher this week and may slow, or even pause, rate cuts in the months ahead. Meanwhile, December industrial production fell 2.1%.

In South Africa, the rand retreated from a more than one-week high as prices of precious metals cooled.

Russia's rouble hovered near a three-week low ahead of a policy decision later this week. The central bank is expected to keep rates ?unchanged, after January data showed price growth picking up again.

In emerging Asia, stocks were mixed after strong gains in the previous session. Philippine shares closed at their highest level in more than three weeks, while Thai equities extended gains on hopes that the weekend election ?could pave the way for greater political stability and pro-growth reforms. (Reporting by Pranav Kashyap in Bengaluru; Editing by Anil D'Silva)