Trade Tensions Sway Emerging Market Equities Amid Greenland Controversy

Emerging market equities faced pressure as President Trump's Greenland ambitions fueled tariff threats, affecting global investor sentiment and propelling gold prices. The MSCI emerging markets index dipped, while U.S. markets were poised to reopen. Central Europe saw mixed stock performances, and Asia faced declines amid looming political and economic uncertainties.

Emerging market equities fell under pressure on Tuesday as U.S. President Donald Trump's controversial move to acquire Greenland reignited tariff threats. This development adversely affected investor sentiment globally, driving safe-haven assets like gold to new highs.

Trump's announcement to increase tariffs on European products unless the U.S. is granted access to purchase Greenland revived the 'Sell America' narrative that started with last April's tariff impositions. The MSCI Emerging Markets index registered a 0.5% decline, with unchanged movement in the currencies index as the U.S. dollar came under selling pressure.

Stock markets across Europe saw mixed results, as Poland experienced a 1.5% drop, while Czech shares slid by 0.8%. Meanwhile, in Asia, South Korean stocks broke a 12-day winning streak as most slipped lower, excluding Thailand's SET Index that rose by 1.3%. Investors are also closely watching Trump's address at the World Economic Forum in Davos and pending Supreme Court rulings on tariffs.