2 weeks Ago
Emerging market stocks rose on Wednesday to recoup their losses for the year, as investors expect the asset class to benefit from eroding confidence in US equities. The MSCI Emerging Markets Index gained as much as 1.4%, with South Korea’s Kospi gauge recovering its drop seen in the wake of US reciprocal tariffs earlier this month.
India was the first major market to wipe out such tariff-induced declines last week. The resilience stands out as US stocks remain 10% down for the year. Money managers are increasingly seeing the Trump administration’s flip-flops on tariffs and other policies as a risk for the US economy and dollar assets, inspiring a so-called “Sell America” trade.
Not Firing Powell While emerging market assets tend to suffer when US stocks are sold off, that’s no longer seen as valid as President Donald Trump's attempts to reshape the global trade order. Risk appetite got a boost on Wednesday following softer US rhetoric on China and the Federal Reserve. Trump said he had no intention of firing Fed Chair Jerome Powell.
On China, he told reporters that US tariffs will come down “substantially” from their current level of 145%. MSCI Inc.’s broadest gauge for EM stocks is set for its fifth day of gain, widening its year-to-date outperformance over the S&P 500 Index to more than 10 percentage points.
Also Read: Chinese stocks in Hong Kong rally on bets trade tensions to ease.
