Emerging Markets on a Winning Streak

Emerging market stocks are headed for their longest profit streak in over two decades, with nine consecutive months of gains, largely fueled by investment in Asian technology shares.

The MSCI equity benchmark for developing nations rose by 0.4%, bringing its monthly gain to 6.9%. Hong Kong played a significant role in this growth, alongside chipmaker Taiwan Semiconductor Manufacturing Co. Additionally, major players like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. contributed notably this Tuesday.

The optimism surrounding Asian tech stocks is primarily linked to advancements in artificial intelligence. Ipek Ozkardeskaya, a senior analyst at Swissquote, mentioned that global investors are still somewhat underexposed to Chinese stocks, indicating opportunities for further gains.

“Despite a robust rally this year, Chinese tech stocks are still valued lower than their U.S. counterparts, raising concerns about growth multiples,” she noted.

Meanwhile, emerging market currency measurements mostly held steady. Traders seem to be taking a cautious stance, particularly in light of potential U.S. government shutdowns, although the immediate market impact appears minimal.

Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, emphasized their dedication to offering varied services to clients.

In Israel, the benchmark TA-35 index hit record highs following an agreement between President Donald Trump and Israeli Prime Minister Benjamin Netanyahu on a 20-point plan to end the Gaza conflict. However, the shekel weakened, reversing some of its prior gains.

On the other hand, Philippine markets continued to decline, with the peso suffering as corruption allegations against government officials led to waning investor confidence and capital outflows.

In credit markets, Kuwait made its first attempt to engage international bond investors in eight years on Tuesday, while Egypt presented a benchmark sukuk transaction.