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Zloty, forint climb after French elections

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Robust demand boosts India factory growth in June, PMI

shows

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Turkey could get funding boost after FATF upgrade, Simsek

says

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Chinese factory activity up in June

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Stocks up 0.1%, FX flat

By Johann M Cherian

July 1 (Reuters) - The rand led gains among most

emerging market currencies on Monday after South Africa unveiled

its long-awaited cabinet following recent elections, while

investors also parsed through several factory activity surveys

from local economies.

The currency strengthened 1% and hit over a one-week

high after President Cyril Ramaphosa announced his long-awaited

new 32-member cabinet of the country's first coalition

government, including appointing a former opposition leader as

agriculture minister.

Yields on South Africa's benchmark sovereign bond

slipped 12 basis points (bps), while the all-share equities

index rose 0.9% and notched a one-week high.

"Markets will be hoping that the broader political party

inclusion in parliament can results in fast-tracked structural

reform and help lift economic growth within the country. There

might be a narrative to start easing rates sooner to further

support growth," said Shaun Murison, senior market analyst at

IG.

The rand has swung between outsized gains and declines as

uncertainty brewed in the run-up to the announcement.

MSCI's index-tracking equities in the developing world

inched up 0.1%, while the currencies index

was flat against the dollar.

Investors await U.S. employment reports throughout the week

that can impact the Federal Reserve's policy path.

With most emerging market currencies trading at record lows,

they stand the risk of further depreciation as local central

banks cut interest rates even as the Fed delays its easing

cycle.

China's blue-chip stocks closed up 0.5% and the

Shanghai index ended higher by 0.9% after a survey

showed manufacturing activity in the world's second-largest

economy grew at the fastest pace in more than three years in

June.

However, the numbers contrasted official data that was

released on Sunday.

Turkey's lira strengthened 0.5%. The local

finance minister said foreign investment could accelerate after

the country was lifted from an international financial crime

watchdog's "grey list" late last week.

Ahead of June inflation data due on Wednesday, he also added

that monthly inflation would ease to 2% and 1% in the upcoming

period.

In South Asia, India's BSE Sensex equity index

added 0.6%. Data showed manufacturing activity rebounded in June

on robust demand, despite inflationary pressures remaining

elevated.

In Europe, the focus is squarely on elections in France

following the far-right National Rally party's historic win, and

analysts at Barclays expect central and eastern European

currencies to be sensitive to further developments ahead of

Sunday's runoff.

Poland's zloty climbed 0.4% against the euro,

while Hungary's forint firmed 0.5% to a three-week

high.

Markets also assessed manufacturing surveys in the region,

ahead of central bank policy decisions out of Poland and Romania

later in the week.