Emerging Markets Rebound: Currencies and Stocks on the Rise

Emerging market currencies and stocks showed gains on Tuesday, rebounding after a commodities sell-off. Notably, MSCI's index of global EM stocks saw a significant jump, and South Korean stocks reached a record high. Gains were partially driven by improving risk sentiment and diminished pressure on metals equities.

Emerging market currencies saw a resurgence on Tuesday, following a three-day decline. Stocks also rebounded, benefitting from an easing in the commodities sell-off that had previously weighed heavily on equities in resource-rich economies.

The MSCI's index monitoring global EM stocks notably increased by 2.5%, marking its largest one-day rise since April. This followed a more than 4% drop over the preceding sessions, primarily due to pressure on metals equities. Gold and silver prices bounced back dramatically, with gold marking its highest daily gain since November 2008.

Asian stocks were generally on the rise, with South Korea's KOSPI gaining nearly 7%, a recovery supported by U.S. tech stock surges and expectations of market reforms. In India, both the stock market and the rupee appreciated, spurred by a favorable trade deal with the U.S. Meanwhile, Ukraine's international bonds climbed in response to promising ceasefire discussions with Western allies regarding Russia.