Record Highs in Emerging Markets: AI Optimism Drives Surge

Emerging markets reached new record highs driven by AI optimism and notable developments in South Africa's budget, sustaining a strong rally. Asian tech stocks outperformed, fueled by perceived affordability and positive AI news. Key moves in local currencies and stocks were observed across South Africa, Central Europe, and Asia.

Emerging market stocks and currencies soared to new highs on Wednesday, fueled by a wave of AI optimism. Investors were closely watching South Africa's annual budget announcement.

The MSCI's emerging market equities index rose 1.3%, marking its sixth consecutive day of growth. The currency index also saw a modest 0.2% increase.

In Asia, the tech sector led the surge as shares remained more affordable compared to inflated Wall Street tech giants. This shift came after San Francisco-based startup Anthropic launched new AI functionalities, renewing hopes for substantial industry profits. Meanwhile, in South Africa, Johannesburg stocks climbed 1%, and the rand strengthened 0.4% as traders awaited the budget's details.

(With inputs from agencies.)