AI Euphoria Boosts Asian Stocks Amid High-Stakes US-China Summit

Emerging market currencies were subdued while stocks surged amid a rally in Asian markets driven by AI enthusiasm. This rise comes as the US and Chinese presidents meet, sparking optimism and skepticism. Concerns over Taiwan and the Middle East were highlighted, influencing currency and inflation dynamics in emerging markets.

Emerging market currencies remained subdued on Thursday, while stocks saw an uptick driven by a rally in Asian markets fueled by artificial intelligence optimism. This buoyancy coincided with a crucial summit between U.S. President Donald Trump and Chinese President Xi Jinping, sparking both anticipation and concerns.

At the meeting in Beijing, signs of progress in trade talks were evident, though caution lingered due to ongoing tensions over Taiwan. Markets were particularly attentive to potential remarks regarding the Iran conflict, with Trump indicating a lessened need for China's involvement.

The summit saw the Chinese yuan hitting a three-year high against the dollar. Meanwhile, Asian stocks soared; South Korea's Kospi was up 1.8%, with Taiwan and India also experiencing gains. Emerging European markets saw mixed currency reactions amid geopolitical tensions, and Turkey's central bank adjusted its inflation outlook due to the Iran conflict's effects.