On a Tuesday in early February, emerging market assets turned upward after a few rough sessions, as currencies and stocks in developing economies recovered from a slide that had been driven by a commodities sell-off. The rebound reflects a familiar rhythm in global markets, where resource-dependent economies rise and fall with the prices of metals, and where a sudden reversal in gold and silver can lift the mood of entire regions at once. Yet the recovery rests on several threads that have not yet been woven together, from a surge in American technology shares to a trade agreement with the Uni
Emerging Market Currencies and Stocks Rebound as Commodities Sell-Off Eases
Gold's biggest daily gain since November 2008
Mark
So what actually happened on Tuesday?
Mimi
Emerging market currencies and stocks rebounded after three days of losses. MSCI's emerging market stock index rose 2.5%, its best day since April.
Mark
And that came after a fall?
Mimi
Yes, more than 4% over the previous sessions, mostly from metals equities being sold.
Luke
Worth noting a one-day jump of 2.5% doesn't erase a 4% drop. It's a rebound, not yet a recovery.
Mark
What about gold and silver?
Mimi
Both bounced back sharply. Gold had its largest daily gain since November 2008.
Mark
Why did Korea move so much?
Mimi
The KOSPI rose nearly 7% to a record high, tied to U.S. tech strength and expectations of market reforms.
Luke
Those are expectations, though. The reporting doesn't say which reforms or whether anything concrete has been announced.
Mark
And India and Ukraine?
Mimi
India's stocks and rupee gained on a U.S. trade deal, and Ukraine's bonds rose on ceasefire talks.
Luke
The ceasefire talks are described only as promising. We don't know what was discussed or whether anything will come of it.
Der Puls
- MSCI's emerging market stock index jumped 2.5% in a single session, its strongest day since April, after more than four sessions of steep losses.
- Gold posted its largest daily gain since November 2008 as metals equities, which had dragged markets lower, suddenly found their footing.
- South Korea's KOSPI surged nearly 7% to a record high, carried by a rally in U.S. technology stocks and hopes for market reforms.
- India's stocks and rupee strengthened on a trade deal with Washington, while Ukraine's international bonds climbed on ceasefire talk.
- Traders now watch whether metals and tech gains can hold, and whether the India trade deal and Ukraine negotiations keep the rally alive.
On a Tuesday in early February, emerging market assets turned upward after a few rough sessions, as currencies and stocks in developing economies recovered from a slide that had been driven by a commodities sell-off. The rebound reflects a familiar rhythm in global markets, where resource-dependent economies rise and fall with the prices of metals, and where a sudden reversal in gold and silver can lift the mood of entire regions at once. Yet the recovery rests on several threads that have not yet been woven together, from a surge in American technology shares to a trade agreement with the United States and fragile hopes for talks over Ukraine. Whether this turn becomes a durable change or a brief pause in the decline remains, for now, an open question.
Emerging market assets turned higher on Tuesday, bringing relief after a few rough sessions. Currencies in developing economies bounced back from a three-day slide, and stocks recovered as the commodities sell-off that had been squeezing resource-heavy economies began to ease.
The clearest sign was MSCI's index of emerging market stocks, which climbed 2.5%, its biggest one-day gain since April. It followed a drop of more than 4%, driven largely by pressure on metals companies. Those same metals then staged a sharp comeback, with gold posting its largest daily gain since November 2008. For economies that depend on commodity exports, which had been among the hardest hit, the reversal lifted a heavy weight.
Asia led much of the rally. South Korea's KOSPI rose nearly 7% to a record high, a move tied to a surge in U.S. technology stocks and expectations of market reforms. In India, both stocks and the rupee strengthened after a trade deal with the United States, which was described as favorable. Ukraine's international bonds also rose on what were called promising ceasefire discussions with Western allies over Russia, though the details of those talks remain unclear.
The gains were credited to improving risk sentiment and some relief for metals-linked shares. Still, the question hanging over the market is whether the revival in metals and technology holds, and whether the trade deal and ceasefire talks can keep the momentum going in the sessions ahead.
Emerging market assets turned higher on Tuesday after a rough few sessions. Currencies in developing economies bounced back following a three-day slide, and stocks recovered as the commodities sell-off that had been hurting resource-heavy economies began to ease.
The clearest measure was MSCI's index of global emerging market stocks, which rose 2.5%. That was its largest one-day gain since April. The jump followed a decline of more than 4% over the preceding sessions, a drop driven mainly by pressure on shares of metals companies.
Metals themselves staged a sharp recovery. Gold and silver prices bounced back dramatically, and gold's daily gain was its biggest since November 2008. The reversal took some of the weight off equities in economies that depend on commodity exports, which had been among the hardest hit.
Asia led much of the rally. South Korea's KOSPI gained nearly 7% and reached a record high. The source ties that recovery to two things: a surge in U.S. technology stocks and expectations of market reforms.
In India, both the stock market and the rupee strengthened. The driver there was a trade deal with the United States, described as favorable, which lifted sentiment toward Indian assets.
Elsewhere, Ukraine's international bonds climbed. Investors responded to what were described as promising ceasefire discussions with Western allies concerning Russia. The report gives no further detail on those talks.
Overall, the day's gains were attributed to improving risk sentiment and reduced pressure on metals-related equities. What remains open is whether the recovery in metals and technology shares holds, and whether the India-U.S. trade deal and the Ukraine ceasefire discussions keep supporting the rally in the days ahead.
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