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EM Stocks Pause as Dollar Firms, Trading Thins
17 Feb
Summary
- Emerging market stocks and bonds saw minimal change due to a stronger dollar.
- Low trading volumes were observed because of holidays in major Asian markets.
- Infosys's AI development plans contributed significantly to market gains.
Emerging-market equities and debt showed minimal fluctuation on Tuesday. This subdued performance was largely attributed to a stronger U.S. dollar and significantly thinner trading volumes. Major financial markets, including China and South Korea, were closed for the Lunar New Year holiday, impacting overall activity. The MSCI Emerging Markets Index experienced a slight uptick, extending its recent positive streak.
Infosys Ltd., an Indian technology firm, was a notable performer, contributing substantially to the index's gains. The company announced its intention to develop artificial intelligence solutions for various corporate sectors. This strategic move occurs as India hosts a major AI summit, highlighting its commitment to advancing its global technology standing.
Emerging market assets are currently seeking new drivers for growth following their strongest year-opening performance in recent history. Despite record highs scaled by stock, bond, and currency gauges this month, ongoing capital rotation from the U.S. suggests potential for further gains. However, market participants are closely monitoring the U.S. dollar's trajectory, viewing its recent stability as a crucial factor influencing emerging market currencies.
