Emerging Stocks Rally as Alibaba Surges on AI Revenue Boost

An advertisement for Alibaba Cloud at the Beijing Capital International Airport in Beijing. Photographer: Na Bian/Bloomberg

(Bloomberg) -- A gauge tracking emerging-market equities rallied on Monday amid thin liquidity due to a US holiday, boosted by artificial intelligence-related stocks in Hong Kong and China after Alibaba Group Holding Ltd. reported a surge in revenue from AI.

The MSCI EM Index rose 0.7% as Alibaba jumped 19% in Hong Kong — the most in three years — after the Chinese e-commerce giant reported a triple-digit percentage gain in AI-related product revenue as well as a better-than-anticipated 26% jump in sales from the cloud division. The rally marks a break from last week’s broader Asian market decline after a tech selloff hit Wall Street.

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The MSCI EM currency gauge was little changed with the Labor Day holiday in the US trimming liquidity. The rupiah rose the most against the dollar in Asia after Bank Indonesia stepped in to defend the currency following political unrest over the weekend.

“While we think such unrest is likely to be short-lived, investors will no doubt de-risk or increase hedges on their Indonesia portfolios,” Wee Khoon Chong, senior strategist for BNY Mellon in Hong Kong, wrote in a note.

Indonesia stocks sold off on Monday following the protests, while investors are eyeing developments in Thailand after the Constitutional Court ended Paetongtarn Shinawatra’s premiership on Friday.

In Europe, Poland’s gross domestic product was boosted by gains in domestic demand in the second quarter, data showed Monday. The zloty joined regional peers in advancing against the euro and dollar.

Investors are also monitoring developments on US tariffs after most of President Donald Trump’s global tariffs were ruled illegal by a federal appeals court on Friday.

--With assistance from Abhishek Vishnoi and Vrishti Beniwal.

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