(Bloomberg) — Emerging-market stocks rose Tuesday, with the main gauge of stocks making a final push for the year on the back of a rally in Asian technology and signs that China is preparing to unleash more stimulus.
Most read from Bloomberg
MSCI’s benchmark index of emerging market stocks rose for a second day in thin pre-holiday trading, supported by a 1% advance in Chinese stocks. While it’s on track for a total return of about 9%, it’s still far underperforming developed-market stocks, which have returned more than 20% so far this year.
The MSCI Emerging Currency Index fell for the second session. The index is hovering around the lowest level since August and is heading for a loss of 0.5% this year. Meanwhile, sovereign and dollar corporate bonds from emerging markets returned about 7% in 2024, according to the Bloomberg index.
A number of headwinds loom for developing countries, including threats of higher tariffs by President-elect Donald Trump, geopolitical tensions and signs of steady inflation. However, some investors remain optimistic.
“2025 will see volatility again, especially when Trump officially comes to power, but emerging market companies have very sound fundamentals that will help them navigate this uncertain environment,” said Arnaud Bouille, fixed income portfolio manager at the bank. Julius Baer in Zurich. “Net leverage is very low relative to investment grade, but also companies with high yields and default expectations are very low as well.”
In a positive move for the markets, Chinese markets received a boost from a Reuters report that policymakers plan to sell special treasury bonds worth a record three trillion yuan ($411 billion) in 2025 to support the slowing economy. Chinese stocks rose, with gains this year reaching more than 16%.
Asian technology stocks also extended their recent rally, with Taiwan Semiconductor Manufacturing Co. hitting a record high, putting the world’s largest contract chip maker on track for its best annual stock performance in 25 years. The stock rose as much as 1.4% on Tuesday, before erasing gains to close flat. Alibaba Group Holding Limited shares also jumped by 2.7%.
The Colombian peso rose 1 percent as it was the best performing among developing currencies, while the South African rand fell significantly, down 0.6 percent. The South Korean won was undermined by weak consumer confidence data as well as the opposition party’s pledge to open impeachment proceedings against acting President Han Dak-soo.
https://media.zenfs.com/en/bloomberg_markets_842/73ce5654df41430cf829195b79db3dca
Source link