Emerging Market Stocks Perform Well Amid US Holidays
(Bloomberg) – Emerging market stocks enjoyed a positive session, representing their best performance this week, thanks in part to reduced liquidity from US holidays. The boost came particularly from artificial intelligence-related companies in Hong Kong and China, following notable revenue increases in this sector.
The MSCI EM index increased by 0.6%, with Alibaba leading the charge—its shares soaring 19%, which is the largest jump in three years. This rally contrasts sharply with the broader Asian market’s decline last week, which faced pressure from technology sell-offs in Wall Street.
In currency markets, movements were subdued due to limited liquidity from US worker holidays. Interestingly, the Indonesian Rupiah strengthened against the Asian dollar. This came after the Indonesian central bank stepped in over the weekend to stabilize its currency amid political unrest.
Weekong Chong, a senior strategist at BNY Mellon in Hong Kong, noted that while anxiety among investors might be temporary, they are likely to reassess risks and bolster hedging in Indonesian assets.
Following protests, Indonesian shares saw sell-offs on Monday, yet investors are now eyeing developments in Thailand after the Constitutional Court dismissed Prime Minister Paetong Tarun Sinawatra late last week.
In Europe, positive data indicated that Poland’s economic growth, driven by strong domestic demand, improved in the second quarter. Consequently, the Zloty was able to gain ground against both the euro and the dollar.
Market participants are also keeping a close watch on US tariff developments. Recently, a federal court ruled that most of President Trump’s global taxation policies were illegal, although the judge has allowed the tariffs to remain while the case works its way through the system.
As traders return from the US holidays, there’s a collective anticipation for a series of economic indicators expected later this week, which may offer insights regarding the Federal Reserve’s interest rate decisions.
