Emerging-Market Stocks Reach Record High on Boost from Technology Sectors
Emerging-Market Assets Gain as Tech Earnings and Hormuz Developments Boost Sentiment
Emerging-market assets experienced a significant boost, driven by strong technology earnings and hopes of a resumption in shipping through the Strait of Hormuz. According to data from MSCI, the emerging market index rose 2.9% to a record high, with South Korean stocks leading the gains.
A similar gauge for developing world currencies advanced 0.3%, while Bloomberg's dollar spot index edged lower. The improvement in market sentiment was attributed to the lack of incrementally negative news on the geopolitical or oil-price front, allowing investors to focus on the AI cycle. This shift in market focus was highlighted by the strong earnings delivered by some of the largest technology companies in the world, including Alphabet Inc., Apple Inc., and Amazon Inc.
Stock indices in regions seen as key drivers of the AI trade rallied, with Korea's Kospi advancing to a fresh high. Taiwanese stocks opened more than 2% higher, and in China, shares of electric vehicle makers rose after they reported sales that beat estimates. The dollar bond market in Asia-Pacific also witnessed its strongest April in five years, with $38 billion of offerings.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Investor sentiment received a further boost as President Donald Trump announced that the US will begin guiding ships not involved in the Iran conflict through the Strait of Hormuz from Monday. Trump described discussions with Tehran as "very positive" after it received Washington's response to its latest proposal to end the war. The steps to guide neutral ships out through the Strait of Hormuz could pave the way for smoother energy flows after a near-full blockade for two months, which had previously roiled global markets.
| Index | Previous Week | Current Week |
|---|---|---|
| MSCI Emerging Market Index | N/A | 2.9% |
| Developing World Currencies | N/A | 0.3% |
| Bloomberg's Dollar Spot Index | N/A | Lower |
| Korea's Kospi | N/A | Fresh High |
| Taiwanese Stocks | N/A | >2% Higher |
| China's Electric Vehicle Makers | N/A | Higher |
| Asia-Pacific Dollar Bond Market | N/A | Strongest April in 5 Years |
Note: The table above compares key market indices and statistics from the previous week to the current week.
Investor Takeaway
Investors should focus on AI-driven technology sectors for potential gains.
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