Emerging market stocks rose to their highest levels in more than four years, boosted by signs that trade tensions between the United States and China are easing. A stock index of emerging markets rose 1.5% on Monday, hitting its strongest level since June 2021. Among the biggest gainers was Taiwan Semiconductor Manufacturing. Manufacturing), Tencent Holdings and Alibaba Group Holding. The currency index of emerging markets also rose by 0.2%. Market sentiment improved after US President Donald Trump said in an interview with Fox News on Sunday that the tariffs imposed on Chinese goods were “unsustainable” although they “may remain in place.” He added that he enjoys a good relationship with the Chinese leader, and expects to hold a meeting between them in South Korea, where meetings of the Asia-Pacific Economic Cooperation Forum will begin later this month. Trump also referred to three main files in the dispute with China, which are rare metals, fentanyl and soybeans. Also read: Trump: The high US tariffs on China will not last. Optimism reigns in the markets. Chris Weston, head of research at Pepperstone Group, wrote in a research note: “It appears that the markets have already priced in a positive, or at least less negative, scenario,” following Trump’s statements, although the path of trade developments remains unclear. Weston added that the base case scenario in the markets appeared to be based on the assumption that China would roll back its restrictions on rare earth exports, which would allow the current tariff freeze to be extended, “but there are questions as to whether the markets are underpricing the risk of the possibility that China will not back down.” Also read: Malaysia to host US-China trade talks next week. Most of Asia’s emerging currencies strengthened against the dollar, led by the South Korean won and the Indian rupee. US-China conflict under control Barclays analysts, including Lefteris Pharmakis, wrote in a research note: “There are good reasons to expect that the dispute between the United States and China will remain under control for the time being, given the strategic nature of the issues in dispute.” The yuan remained stable after China confirmed its economy was still on track to meet this year’s growth target, despite recording the weakest pace of expansion in a year.
The decline in the trade war is causing a surge in emerging market stocks
