Emerging Markets Juggle Amid Middle East Developments and Trade Tensions

Emerging market assets slipped as investors assessed trade negotiations and Middle East developments during U.S. President Trump's regional tour. MSCI's emerging market index fell, influenced by U.S.-China tariff announcements and geopolitical uncertainties. EBRD cut growth forecasts, while Trump's visit stirred interest due to potential economic deals.

Emerging market assets experienced a downturn on Tuesday as investors carefully evaluated the repercussions of new trade agreements and geopolitical events in the Middle East, a region presently engaged with a high-profile visit by U.S. President Donald Trump.

The MSCI index, tracking emerging market stocks, saw a 0.7% decline, maintaining its position near a seven-month peak. A currency gauge simultaneously fell by 0.2% against the dollar. The market had previously experienced a surge following announcements from Washington and Beijing regarding reductions in reciprocal trade duties.

On the international front, the EBRD has lowered its economic growth predictions for the fourth consecutive time, citing the impacts of tariffs, conflict, and economic instability. President Trump's visit to Saudi Arabia is anticipated to spark significant economic agreements, adding momentum to regional bourses. Meanwhile, Trump's proposal to engage in Ukraine-Russia peace talks highlights the political complexities affecting the economic landscape.

(With inputs from agencies.)