Emerging Markets Stocks Rally as Trade Talks Boost Sentiment
The gauge gained 0.5%, finishing the day at the highest level since President Donald Trump presented his reciprocal tariffs on April 2. The MSCI Index leaped 2.7% last week.
'Positive comments by US Treasury Secretary Scott Bessent about trade deals coming from the US is offering EM assets support,' said Elias Haddad, a strategist at Brown Brothers Harriman & Co.
Monday's gains also put the EM stocks index above its 200-day moving average. If the gauge ends April with an advance, that would mark a gain in each of the first four months of a year — a feat last achieved in 2019. Earnings estimates for the gauge have risen 0.8% this month, the most since August.
For Michael Brown, a senior research strategist at Pepperstone Group Ltd, the recent EM rally has been largely driven by the broad 'sell America' trade amid policy uncertainty from Trump. Those countries that reach trade deals with the US — which result in a permanent lowering of tariffs — are likely to outperform peers.
Meanwhile, in the foreign exchange market currencies were mostly up. The MSCI currency index rose just 0.08% amid a sinking dollar, which fell over 0.5% during the trading session. The South African rand and the Hungarian forint led the gains in the emerging basket, while the Chilean peso lagged its peers, down as much as 1.1%.
Earlier, assets in Colombia dropped after the International Monetary Fund paused access to an $8.1 billion flexible credit line. The country's peso plunged as much as 0.9% while its dollar bonds fell across the curve, with notes maturing in 2035 down 1 cent to about 100 cents on the dollar. The peso closed little changed.
Hopes have grown that the worst of the US tariff threat may be passing after Treasury Secretary Scott Bessent said last week that the US and South Korea could reach an 'agreement of understanding' on trade as soon as this week. Bessent said Sunday that negotiations with some trading partners 'are moving along very well, especially with the Asian countries.'
Traders this week will also be watching for key US data including growth and a gauge of inflation to assess if Trump's trade war has begun to affect the economy. Meanwhile, Chinese officials Monday reiterated a pledge to aid growth ahead of the release of factory activity data later this week.
'Overall we expect US data to show signs of a cooling labor market, but not falling off a cliff,' said Dan Pan, an economist at Standard Chartered Bank.
On Monday, Angola's bonds rallied for some of the biggest gains in emerging markets. The country held talks with the International Monetary Fund last week about possible financing packages, its finance minister said, after trade wars and a slump in energy prices effectively shut the oil producer out of international bond markets.
Bulgaria tapped international markets, selling Eurobonds for the first time this year. The country is issuing a total of €4 billion ($4.5 billion) in bonds, its biggest ever haul of euro-denominated debt in a single day, to fund its growing budget deficit in preparation for euro adoption.
--With assistance from Michael G. Wilson.
More stories like this are available on bloomberg.com
First Published: 29 Apr 2025, 05:39 AM IST
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First Post
29 minutes ago
- First Post
Resuming flights, visas and more… Are India and China inching toward an all-out thaw?
Trump tariffs and geopolitics are pushing India and China closer. But will this result in a complete reconciliation between the two Asian giants? There are signs Indian school students pose with their faces painted with India's (R) and China's national flags. Relations between the two countries are on the mend. File image/AFP The world is in a constant flux. Nations that were once friends turn foe, foes become friends — and China and India aren't immune from this. After years of bickering and contestation, they are now exploring yet another round of engagement. At least, the recent steps taken by the two countries indicate a thaw in ties. The most recent of these being India and China set to resume direct flights as soon as September, with the formal announcement to come around the time when Prime Minister Narendra Modi visits the neighbour at the end of August. 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File image/AP Passenger flights between the two neighbouring countries were suspended after the Covid-19 pandemic, forcing travellers from India to China to pass through hubs like through Hong Kong or Singapore. Before the suspension, India airlines such as Air India and IndiGo as well as Chinese airlines such as Air China, China Southern and China eastern ran services between the key cities of both countries. Interestingly, this isn't the first time that India and China have attempted to restart direct flights. Such an endeavour was made in January as well as June, but stalled owing to diplomatic tensions. Signs of an all-out thaw between India and China The resuming of flights is just another indicator that India and China ties are back on following the Galwan clash of 2020. In a first since 2021, a cargo of Indian diesel is also heading to China. 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The spokesperson of the Chinese Embassy in India also attached an illustration showing an elephant, representing India, and a baseball bat, representing the US tariff. 'India's sovereignty is non-negotiable and its foreign policy choices cannot be manipulated by other countries, no matter how significant their own ties with India are.'----Quoted from @the_hindu — Yu Jing (@ChinaSpox_India) August 6, 2025 There's also the fact that India has resumed issuing tourist visas to Chinese citizens from July 24, following a five-year gap. Additionally, India and China have resumed the Kailash Mansarovar yatra. The diplomatic thaw is also feeding economic hopes. In the last week of July, India's Finance Minister Nirmala Sitharaman hinted a possible revival of India-China business relations, saying, 'How far it will go is something we will have to wait and see.' 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STORY CONTINUES BELOW THIS AD While India and China are pushing forward together, there are obstacles in their way. File image/PTI There's also China's construction of a mega dam on the Yarlung Tsangpo River, which becomes the Brahmaputra upon reaching India, that has stoked anxieties in Delhi about water security. And this year, Beijing is also expected to begin work on a railway line linking Hotan in Xinjiang to Shigatse in Tibet this year. The artery is likely to cross from Aksai Chin and close to the G219 national highway, near the Line of Actual Control. But as Dominic Rohner, an economics professor at the Geneva Graduate Institute and co-director of its Hoffmann Centre for Global Sustainability, noted to the South China Morning Post that the motivation for rapprochement was obvious. 'There are clear incentives to increase bilateral ties, yielding both economic and political benefits,' he said. 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Time of India
29 minutes ago
- Time of India
AriZona 99-cent iced tea founder flags possible price increase due to Trump tariffs; internet disputes his cost freeze claims
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News18
37 minutes ago
- News18
India bit recalcitrant on trade negotiations: US Treasury Secy Bessent
Last Updated: New York, Aug 13 (PTI) India has been a 'bit recalcitrant" on trade negotiations with the US, Treasury Secretary Scott Bessent has said. 'That's aspirational," Bessent said on Fox Business on Tuesday, responding to a question on wrapping up all the tariffs and trade deals by the end of October. 'But I think we are in a good position. The big trade deals that aren't done or aren't agreed – Switzerland is still around, India has been a bit recalcitrant," he said, adding that US Trade Representative Jamieson Greer and teams of lawyers 'are busy papering all this over". 'So I think we will have agreed on substantial terms with all the substantial countries. And as I've been saying for a long time, the President's (Donald Trump) doing peace deals, trade deals, tax deals," he added. Even as trade negotiations between India and the US were ongoing, Trump imposed tariffs totalling 50 per cent on India, including 25 per cent for Delhi's purchases of Russian oil, which will come into effect from August 27. Responding to the tariffs, the Ministry of External Affairs in New Delhi has said that the targeting of India is 'unjustified and unreasonable". 'Like any major economy, India will take all necessary measures to safeguard its national interests and economic security," it said. Last week's announcement of Trump's executive order imposing the additional 25 per cent tariffs on India came at a time when a team from the US is scheduled to visit India from August 25 for the sixth round of negotiations for the proposed bilateral trade agreement. The two countries are aiming to conclude the first phase of the pact by fall (October-November) this year. PTI YAS GRS GRS GRS view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
