NEW YORK, N.Y. – Emerging market shares rallied on Friday to reach a one-week record high, with global equities going higher, as trade optimism grew after the encouraging and hopeful statements from the US President Donald Trump.
The new tariff hike Washington is set to impose on billions worth of Chinese goods is expected to take effect on December 15, which is only a few days from now. Markets have been on the edge of their seats about the tariff hike, but hopes for the US and China to reach phase one of the trade deal is keeping the balance.
Overall, market sentiment has gone positive, powered up by the statement Trump made on Thursday. The US President said that US-China trade discussion is moving right along, although China has remained with its stance that the existing tariffs should be taken down as part of the partial trade deal.
According to a senior market analyst at OANDA, Jeffrey Halley, despite the interim trade agreement between the US and China, has turned to a similar complexity seen with Brexit, at least the two sides are still talking. Halley also said that the updates on trade talks would continue to affect the sentiment of the already volatile market.
On the other hand, the MSCI’s index for the developing-world equities tracked gains on Friday, as predicted, ending the three consecutive weeks of dips.
Optimism towards the recovery of emerging markets has also helped drive investors on risk-on buying, as they hope to reap the benefits of a much lower global interest rates for 2020.
Russian stocks have gained on Friday as well, boosted by the increase in stocks for the gas and oil sector. It followed after the Novatek PAO, and Gazprom PAO share prices increased on strong oil price, following the 50% output cut the OPEC agreed with early in 2020.
Chinese shares also ended much higher on Friday, recording its best weekly increase after almost two months. The South African equities also recorded around a 1.1% increase for the day.
With the weaker dollar, emerging market currencies have also gained, with the currencies index in MSCI for the developing world set for gains in the week.
The US dollar has experienced a lot of pressure throughout the week after weak economic numbers reported. It was seen early Friday going lower as market players wait for the data on US payrolls later in the session.
On the other hand, the yuan tracked around a 0.2% increase against the dollar, set to end the two consecutive weeks of declines, while most currencies of emerging Asian countries also straightened in the day.