By Ukumbi Afrika Emerging market stocks climbed on Thursday as optimism surrounding artificial intelligence (AI) and strong demand for semiconductor technology outweighed concerns over rising oil prices, while currencies posted mixed performances against a steady U.S. dollar.
The MSCI Emerging Markets stock index advanced 1.2%, while the broader emerging market currency index edged 0.2% higher, reflecting cautious investor confidence.
Asian technology stocks led the gains after Alphabet, Google's parent company, raised its capital expenditure forecast following robust cloud-computing growth. Tesla also announced plans to increase spending over the next two to three years, reinforcing confidence in continued AI-related investment despite both companies' shares falling in U.S. pre-market trading.
South Korea emerged as the day's standout performer, with the KOSPI index surging 4.4%, driven by heavyweight chipmakers including Samsung Electronics and SK Hynix. Fresh data from the Bank of Korea also showed the country's economy expanded faster than expected in the second quarter, supported by strong semiconductor demand.
China's blue-chip CSI 300 index posted modest gains of 0.2%, while Taiwan's technology-heavy market traded largely unchanged.
Oil Prices Add Inflation Pressure
Despite the upbeat mood in equity markets, investors remained cautious as oil prices jumped nearly 4%, reaching their highest level in six weeks. The increase followed reports that Yemen's Houthi militia attacked two Saudi oil tankers in the Red Sea, with Saudi authorities confirming that one vessel caught fire.
The renewed surge in energy prices has intensified concerns that inflation could remain elevated, forcing central banks to maintain tighter monetary policies.
According to Geoff Yu, Senior EMEA Market Strategist at BNY, investors are increasingly demanding evidence that massive AI investments are translating into sustainable revenues and long-term returns. He added that rising crude prices are pushing governments and central banks back into defensive positions.
Focus Shifts to Turkey and South Africa
Investor attention is now turning to interest rate decisions from the central banks of Turkey and South Africa, both expected later on Thursday.
South Africa's rand weakened 0.2%, while the country's main stock index fell 0.8% after stronger-than-expected inflation data reinforced expectations of another significant interest rate hike.
Turkey's lira remained largely stable ahead of its policy announcement.
Across Central and Eastern Europe, market performance was mixed. Hungary's benchmark stock index slipped 0.5% after three days of gains, Romania's energy-heavy market rose 0.3%, while Poland's stock market traded flat. The Hungarian forint was the weakest regional currency, declining 0.4% against the euro.
Trade Developments Remain in Focus
Elsewhere, China is seeking public feedback on proposed tariff reductions covering approximately $30 billion in trade with the United States, while Vietnam has reaffirmed its commitment to trade negotiations and urged Washington to conclude its ongoing trade investigation.
Source: Reuters