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The emerging-market equity benchmark gained for a 10th consecutive month in October, as an artificial intelligence (AI) boom and a weaker dollar drove capital inflows.
The MSCI Emerging Markets Index has rallied every month from January to October – a feat last seen in 1993 — and is up around 30 per cent this year. On Friday, it fell 0.7 per cent but closed the month with a 4 per cent gain.
Multiple catalysts have driven that surge, including strong gains in many AI-focused Asian tech stocks and a weaker dollar prompting money managers to diversify beyond US assets. In China, targeted stimulus has helped bolster earnings estimates, fund flows and sentiment.
Emerging-market “stocks are no longer simply banks, commodities and telecoms,” said Sammy Suzuki, head of EM equities at AllianceBernstein in New York. “Tech, consumer and medical sectors with more intellectual property content occupy much larger weights today.”
Emerging-market (EM) assets were under “modest pressure” on Friday, as investors continued to digest the possibility of the US Federal Reserve not lowering interest rates in December, according to Brendan McKenna, EM economist and FX strategist at Wells Fargo Securities in New York.
Fed Chair Jerome Powell said there were “strongly differing views about how to proceed in December”, during a press conference following Wednesday’s rate decision.
