BENGALURU: Most emerging Asian equities and currencies gained on Thursday after China unlocked more fiscal stimulus, while investors held out hopes for a rollback in tariffs after US President Donald Trump exempted some automakers from levies for a month.
The MSCI gauge of emerging market currencies jumped 0.5%, while a gauge of emerging Asian equities rose 2.2%.
China, Southeast Asia’s biggest trading partner, ramped up its fiscal stimulus on Wednesday and promised greater efforts to support consumption and cushion the impact of an escalating trade war with the US on the economy.
Artificial intelligence was a key focus at the opening of the annual meeting of China’s parliament, with promises to foster its application in sectors including electric vehicles, smartphones and robots.
Goldman Sachs analysts raised their target price on emerging markets equities, noting that the AI-driven rally in Chinese stocks could spill over to China-sensitive markets.
“We expect further equity gains as the fiscal stimulus announcement… should continue to stabilise growth and sentiment,” the analysts said.
Chinese stocks were up 1.2%, while the yuan inched 0.1% lower.
Meanwhile, the White House said on Wednesday that it would exempt automakers from Trump’s 25% tariffs on Canada and Mexico for one month as long as they comply with existing free trade rules, suggesting there may be room for negotiation in the trade war.
The Mexican peso edged up 0.1% after a 0.9% jump on Wednesday. The dollar index wallowed near a four-month low.
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