(Bloomberg) -- Emerging-market stocks rose, reversing earlier losses, as speculation intensified that China’s authorities will roll out fresh stimulus measures next month amid the threat of US imposed tariffs.
The MSCI Emerging Markets Index, a key gauge for developing-nation stocks, erased a decline of as much as 0.4% to trade 0.3% higher by 7:33 a.m. in London. Gains were driven by the likes of Tencent Holdings, Meituan, and Alibaba Group Holding Ltd.
Developing-nation currencies were advancing with gains led by the Philippine peso and South African rand.
The tariff threat has weighed on emerging markets since Donald Trump’s election victory and remains a wildcard for 2025. MSCI’s emerging-market stock gauge is eying a second consecutive monthly drop in November, and the worst quarter since September 2022.
Hints of more aggressive policy support emerged earlier this month when China’s Finance Minister Lan Fo’an pledged “more forceful” policies for 2025. These comments fueled speculation that Beijing could unveil bolder measures following Trump’s inauguration in January. The US president-elect has vowed to impose tariffs on Chinese goods, a move that threatens to devastate trade flows between the world’s largest economies and jeopardize China’s export sector, one of the few pillars of growth this year.
“Higher US yields, a stronger dollar, and higher trade tariffs are a challenge for all, but emerging-market equities are relatively cheap compared to their own historical averages and developed-market peers,” said Hasnain Malik, emerging- and frontier-market strategist at Tellimer. “Next year should see simultaneous fiscal stimulus in the US, China, and Japan, and, potentially, an end to wars in Europe and the Middle East.”
Elsewhere, Israeli dollar bonds were among the top 20 best performing in emerging and frontier eurobonds in a Bloomberg index.
Israel reached a deal for a 60-day cease-fire with the Lebanese militant group Hezbollah after weeks of talks mediated by the US, a first step toward ending a conflict that’s killed thousands of people.
President Joe Biden, who spoke after talking with the leaders of Israel and Lebanon, said at the White House Tuesday that all sides had agreed to a cease-fire that would “end the devastating conflict between Israel and Hezbollah.”
In Sri Lanka, the nation this week kicked off an exchange to swap $12.6 billion of its bonds for longer-dated notes as it seeks to complete its dollar-denominated debt restructuring. Dollar debt due 2025 advanced. The central bank also set its new single benchmark interest rate at 8% to bolster the economy’s recovery from the worst crisis in decades.
Anglo American Plc raised 9.6 billion rand ($530 million) from the sale of a 6.6% stake in Anglo American Platinum Ltd., a move aimed at increasing the South African unit’s free float ahead of a full exit.
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