Emerging market stocks rebounded on Thursday, driven by positive earnings from Taiwanese chipmaker TSMC, which boosted technology shares across Asia. Additionally, currencies inched higher against a subdued US dollar, as investors closely monitored the US interest rate trajectory.
The MSCI index for emerging market equities climbed 0.5%, with China’s blue-chip shares bouncing back from a five-year low. TSMC’s strong quarterly profit results and optimistic revenue growth projections supported technology stocks globally. Hong Kong’s technology shares rose 0.5%, while South Korean chipmakers Samsung Electronics and SK Hynix saw gains of 1.0% and 4.0% respectively.
In the currency market, the gauge of emerging market currencies edged 0.2% higher against a muted US dollar. Over the past three sessions, emerging market stocks and currencies had experienced declines, while the dollar rallied due to central bankers’ resistance to early interest rate cuts.
On Thursday, the South African rand rose 0.4% against the dollar, and regional stocks also showed an increase of 1.1%. The South Korean won outperformed other Asian currencies, rising 0.6%, while the Chinese yuan remained close to a two-month low.
Analysts expect the yuan to underperform compared to other Asian currencies and emerging market blocs, citing China’s uncertain economic outlook as a factor. Concerns about equities persist, with potential further impact if authorities fail to intervene.
In other news, Pakistan’s international bonds declined after strikes were conducted inside Iran, following recent cross-border tensions. Kenya plans to access international bond markets once the market conditions are favorable, after securing approval for a $941 million lending from the International Monetary Fund. However, the Kenyan shilling reached fresh record lows against the dollar, declining by 0.5%. The Russian ruble remained steady around the 88-to-dollar mark.