Emerging markets surge to 14-month high on Taiwan stock rally

Emerging market stocks soared on Tuesday to their highest level in over a year, buoyed by a remarkable surge in Taiwan stocks driven by chipmaker TSMC, hitting an all-time high.

The MSCI index for emerging market stocks gained 0.5 per cent by 0851 GMT, briefly touching levels unseen since January 2023.

Taiwan stocks reached a historic peak, propelled by a remarkable 4.6 per cent surge in TSMC shares following the company's securing of a $6.6 billion subsidy for an Arizona production plant.

However, South Korean stocks ended lower, exercising caution ahead of the country's elections scheduled for Wednesday, which will determine the composition of its 300-member National Assembly.

In the realm of emerging market currencies, there was a marginal 0.1 per cent uptick against a subdued Dollar, with impending US inflation data influencing market sentiment.

Alex Loo, Macro and FX Strategist at TD Securities, commented on the week's dynamics, stating, "For this week, quite a few Asia markets are out. The lack of liquidity and perhaps CPI tomorrow, is keeping FX movements more subdued. A big upside surprise on CPI could trigger a dollar rally."

Meanwhile, markets in the Philippines and Indonesia remained closed due to public holidays, alongside Gulf markets and the Egypt stock exchange shuttering for the Eid al-Fitr holidays, slated to reopen on Sunday, April 14.

Israel's shekel experienced a 0.3 per cent uptick following its notable 1.8 per cent surge against the dollar on Monday subsequent to the central bank's decision to maintain interest rates.

In Central and Eastern Europe, Poland's Zloty registered a 0.2 per cent increase against the euro, hovering near levels last observed in early 2020 in anticipation of an anticipated inflow of European Union funds.

Notably, Poland's local government elections, which saw the nationalist opposition party Law and Justice (PiS) secure the popular vote according to final results on Monday, had minimal impact on markets.

Elsewhere, the Russian rouble exhibited slight strength against the US dollar, while South Africa's rand saw a 0.7 per cent rise.

In the realm of emerging markets, El Salvador initiated a tender offer for its external debt due from 2025 to 2029, as announced by President-elect Nayib Bukele on Monday via the social media platform X.

Moreover, the International Monetary Fund disclosed that its staff reached an agreement with authorities from Ivory Coast on a review of two lending programs, paving the way for the disbursement of $574 million, subject to approval by the IMF's executive board.

Bulgaria's President Rumen Radev appointed a caretaker government led by Prime Minister Dimitar Glavchev, setting June 9 as the date for snap elections, as revealed by the president's office.

(With Reuters inputs.)