EMERGING MARKETS-Set for weekly losses as doubts arise over COVID-19 drug efficacy

* Russia’s rouble muted ahead of c.bank rate cut

* Central European currencies firm against euro

* Hungary’s forint gains on reopening plans

* MSCI EM stocks index eyes 1.8% weekly loss

By Ambar Warrick

April 24 (Reuters) – Developing world stocks fell on Friday as sentiment was dampened by doubts over the effectiveness of a potential coronavirus drug, with continued signs of economic damage from the outbreak pushing markets towards weekly losses.

Risk appetite was dealt a fresh blow after U.S. firm Gilead Sciences’ experimental antiviral drug failed to help patients with severe COVID-19 symptoms in a clinical trial conducted in China, although the drugmaker said the findings were inconclusive.

The news exacerbated concerns over the virus, adding to dismal business activity readings from the developed world and a crash in oil prices seen earlier in the week.

The MSCI’s index of developing world stocks fell 0.8%, and was set to lose 1.8% for the week. Currencies fell 0.2% and eyed a 0.5% weekly loss.

After falling sharply through March, emerging markets recovered some lost ground before trading largely rangebound over the past few weeks, reacting only to headlines on the virus.

“Economists are dealing with three levels of uncertainty. Uncertainty about the virus. Uncertainty about the policy response. Uncertainty about the economic response to the virus and to policy. Changes in any one of those change economic outcomes,” said UBS Chief Economist Paul Donovan.

“Reports of poor test results for a possible treatment weakened risk markets somewhat.”

Adding to doubts were European Union leaders deferring decisive details on a trillion-euro coronavirus relief fund. Most Central European currencies rose against the euro, but fell to the dollar.

Turkey’s lira fell about 0.3%, as markets in the country resumed trade after a holiday on Thursday. The country’s central bank had slashed key interest rates by a more than expected 100 basis points on Wednesday.

Turkish stocks were a shade higher.

Russia’s rouble was steady ahead of a policy rate decision by the central bank later in the day. The bank had already indicated it would begin trimming rates to shore up liquidity in face of the outbreak.

The rouble was set to shed nearly 1% for the week, owing to a crash in oil prices. Russian stocks were also weaker.

The Hungarian forint rose against the euro and the dollar after Prime Minister Viktor Orban said the country will begin easing parts of its coronavirus lockdown early next month, adding that he expected the economy to recover rapidly.

For GRAPHIC on emerging market FX performance in 2020, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2020, see tmsnrt.rs/2OusNdX

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For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Ambar Warrick in Bengaluru; Editing by Ramakrishnan M.)

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