Emerging Markets Surge Amid Temporary Tariff Pause

Emerging market assets rose after Donald Trump temporarily paused some tariffs on world economies, though tensions between the U.S. and China remain high. The MSCI index saw a significant increase, and currencies of smaller economies advanced. Investors remain cautious about global economic slowdown risks.

On Thursday, emerging market assets experienced a boost following U.S. President Donald Trump's announcement of a temporary pause on certain tariffs affecting global economies. Despite this positive momentum, uncertainty persists regarding the escalating tension between the U.S. and Beijing.

The MSCI index, which tracks stocks in developing economies, surged by 3.8%, poised to mark its largest one-day leap since November 2022. Notably, bourses in Pakistan and Sri Lanka rose by 2% and 4.6%, respectively, with Turkey and South Africa following suit with gains of 2.4% and 3%.

In currency markets, a rise of 0.7% was observed, marking the steepest daily ascent since December 2023, led by the Turkish lira and the Sri Lankan rupee. Bonds of smaller economies, notably from Nigeria and Angola, continued to gain traction, reflecting a broader investor optimism fueled by recent upbeat revenue reports from key global sectors.

(With inputs from agencies.)