Geopolitical Tensions Sway Emerging Market Assets

Emerging market assets faced pressures after the U.S. and EU increased sanctions on Russia. Investors' hopes for conflict resolution dwindled, affecting equities and currencies. Turkey's economic policies and Indian equities also influenced market dynamics, with global oil prices reacting to shifts.

Emerging market assets experienced setbacks on Thursday as geopolitical tensions escalated with the U.S. and European Union intensifying sanctions against Russia. This increased pressure highlights the vulnerabilities in markets that have otherwise shown strong returns this year.

The MSCI index for emerging markets equities slipped by 0.1%, echoing a similar dip in the currencies gauge. Hopes for a diplomatic resolution to the Russia-Ukraine conflict faltered after a planned summit between U.S. President Donald Trump and Russian President Vladimir Putin was postponed, further impacting investor sentiment.

Meanwhile, Turkey's central bank promises to be a focal point, as policy decisions loom amid growing concerns over inflation. Investors also watch Indian markets closely, as both the BSE Sensex and NSE Nifty 50 indices register gains, driven by optimism around U.S. trade discussions, even as oil prices increase over 3%.

(With inputs from agencies.)