BENGALURU: Asian emerging market equities climbed for a fourth consecutive session on Tuesday as risk sentiment improved after US President Donald Trump hinted he might grant exemptions on auto-related tariffs.
Currencies hovered around multi-week highs against the dollar, which held near a two-year low versus a basket of major peers. Meanwhile, an MSCI index tracking emerging market currencies hovered at a seven-session high.
Investors took delight in signs of temporary tariff exemptions for certain sectors and hopes that punitive levies could be negotiated down after the last two weeks’ unprecedented volatility that rocked financial markets.
Overnight, Trump said he was considering a modification to the 25% tariffs imposed on foreign auto and auto parts imports, sending shares of carmakers such as Toyota, Hyundai Motor and Kia Corp soaring.
“At this juncture, tariff narrative has turned more constructive, as opposed to chaotic in the last week,” analysts at DBS wrote in a note.
“A more organised tariff framework around pharmaceuticals, semiconductors and autos is probably in the works. With more time to adjust supply chains, potential disruptions could be minimised.”
Nevertheless, caution prevailed as Trump’s ever-changing tariff policies and the ongoing trade tensions between China and the United States cast a cloud over global trade flows and economic growth.
An index of stocks in Asian emerging markets rose more than 1% to a six-session high, while a gauge of equities in ASEAN countries - dominated by Southeast Asian firms - scaled to a one-week high.
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