Emerging Market Stocks Erase Losses from Iran Conflict, Bolstered by AI Trading Optimism

Deep News04-20

Emerging market equities have fully recovered the losses incurred due to the Iran conflict, lifted by optimism surrounding artificial intelligence trading which boosted Asian stock markets. The MSCI Emerging Markets Index rose 0.9% on Monday, surpassing its closing level of 1610.70 points from February 27.

Although uncertainties persist regarding progress in US-Iran peace talks, and the Strait of Hormuz was closed again over the weekend, geopolitical tensions have significantly eased compared to March. Meanwhile, emerging market currencies weakened. During Monday's early trading session, the South Korean won led the decline among emerging market currencies, falling as much as 1.5%, marking its largest drop in over a month. Other major regional currencies, such as the Malaysian ringgit, also declined.

Christopher Wong, a strategist at OCBC Bank, stated that this highlights the rapidly changing nature of the geopolitical situation and continues to demonstrate the necessity for two-way trading. He added that the South Korean won, which had previously been boosted by positive developments, might face a more pronounced pullback. Due to their sensitivity to oil prices and risk sentiment, the Indian rupee, Thai baht, and Philippine peso are expected to remain relatively weak.

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