Emerging Stocks Set for Longest Monthly Rally Since 2004 on Tech

(Bloomberg) -- Emerging-market stocks are headed for their ninth consecutive month of gains, the longest winning streak in more than 21 years, as investors continue to pour money into Asian technology shares.

The MSCI’s equity benchmark for developing economies rose 0.4%, extending the monthly advance to 6.9%. Hong-Kong listed blue chips Alibaba Group Holding Ltd. and Tencent Holdings Ltd. were the main contributors on Tuesday, together with chipmaker Taiwan Semiconductor Manufacturing Co.

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Asian technology stocks have been benefiting from optimism around companies linked to artificial intelligence developments. Global investors remain relatively under-exposed to Chinese shares, leaving more room to extend their advance, according to Ipek Ozkardeskaya, a senior analyst at Swissquote.

“Chinese tech stocks, despite a strong rally this year, still trade at cheaper valuations than their US peers, where stretched multiples are becoming a concern,” she said.

A guage of emerging-market currencies was little changed on Tuesday, with Hungarian forint leading gains against the dollar. Traders are watching out for a potential US government shutdown, although it appears to have had a limited impact on markets so far.

“We advise investors to look past shutdown fears and focus on other market drivers, such as the mix of continued Fed rate cuts, strong corporate earnings, and robust AI capex and monetization,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note.

Israel’s benchmark TA-35 Index rose to a record high after President Donald Trump and Israeli Prime Minister Benjamin Netanyahu said they had agreed to a 20-point plan designed to end the war in Gaza. The shekel dropped, paring some of its gains from the previous day.

Philippine stocks extended their slump, and the peso weakened, as corruption allegations on government officials eroded investor sentiment and triggered foreign outflows.

In credit markets, Kuwait was tapping international bond investors for the first time in eight years on Tuesday, while Egypt offered a benchmark sukuk transaction.

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