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Currencies remain flat

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Trade hopes support oil prices

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Argentina vote boosts sentiment

By Niket Nishant

Oct 27 (Reuters) - Hopes of a trade deal between the

U.S. and China pushed emerging market equities to their highest

since February 2021 on Monday, while investors also eyed

Argentina after President Javier Milei's party secured a

decisive victory in midterm elections.

The moves should help emerging markets kick off the week on

a strong note, ahead of a potential trade agreement between the

world's two biggest economies that is expected to remove a major

overhang on global growth prospects.

An MSCI index tracking emerging market stocks rose

1.3%. The currencies gauge, however, was flat

and remained rangebound.

Later in the day, attention is set to shift to Latin

America, where Argentina President Milei's party cruised to

victory in midterm legislative elections held over the weekend.

The win is expected to give Milei the political capital to

press ahead with sweeping reforms that have curbed triple-digit

inflation, and could also draw foreign capital.

"Foreign investment is very underwhelming in Argentina. But

the current administration is looking to stay on the path of

reform. The opportunity in Argentina is absolutely

unprecedented," said Thea Jamison, founder of investment

management firm CHANGE Global.

TURKEY JITTERS RESURFACE

Turkey's main BIST 100 share index eased 0.1% after

hitting a three-week high in the previous session.

A Turkish court issued a fresh arrest order for Istanbul's

jailed mayor Ekrem Imamoglu on suspicion of "political

espionage", marking a new stage in an unprecedented crackdown on

President Tayyip Erdogan's opponents.

Concerns about democratic backsliding in the country have

unsettled investors in recent months.

Data released on Monday showed that the unemployment rate in

the country held steady at 8.6% in September.

Separately, South Africa's rand strengthened 0.1%

against the dollar while stocks also climbed 0.1% after

the country was removed from the Financial Action Task Force's

"grey list".

The Nigerian naira was poised to strengthen against

the dollar for the second straight day after its removal from

the list.

Oil prices rose after easing fears that tariffs and export

curbs between the U.S. and China, the world's top two oil

consumers, could dent global economic growth.

"The view here would be that the meeting between U.S.

President Donald Trump and Chinese President Xi Jinping on

Thursday might see a formal agreement and enact a further delay

of severe mutual tariff levels threatened in April," economists

at ING wrote in a note.

Saudi Arabia's benchmark index, whose fortunes are

closely tied to oil prices, was 0.4% higher. Oil behemoth Saudi

Aramco's shares crept 0.2% higher.