AI euphoria powers emerging market stocks' best week since June

Polish equities were 0.18% lower, while the Polish zloty was slightly weaker against the euro. Prime Minister Donald Tusk said on Thursday that the government plans to reintroduce some measures to lower fuel prices in the last two weeks of August. Malaysia's central bank said the economy could expand by around 5% this year, toward the upper end of its 4%-5% growth forecast, after stronger-than-expected second-quarter growth. The ringgit was largely unchanged against the dollar. South Korea's KOSPI rose 2.42% on Friday and was set to snap a seven-week losing streak. The Korean won strengthened 0.39% against the dollar. Earlier this week, a presidential official said South Korea would launch a 5 trillion won ($3.52 billion) semiconductor fund as Seoul seeks to accelerate plans for new chip manufacturing hubs across the country. Taiwanese equities were also set for the second consecutive week of gains, while the Taiwan dollar hit its strongest level in over a month on strong inflows into the country's stocks. In India, the rupee was little changed, with traders saying that the central bank likely intervened to support the currency. China's yuan rose 0.05% versus the dollar, heading for a seventh straight weekly gain, aided by a firmer midpoint fixing and some hopes that the U.S. Federal Reserve will not hike rates in September. Emerging market stocks were on course for their biggest weekly gains since June, as investors' affinity for AI favourites resurfaced despite an ambiguous rate outlook. The MSCI index of emerging market stocks rose 0.38% on Friday and was set for gains of 2.64% for the week — the steepest jump since June. The currencies gauge rose 0.22%. Strong earnings from some tech majors that serve as a barometer for AI demand improved sentiment during the week. Benign U.S. inflation data also reduced the urgency for rate hikes and helped Wall Street, boosting emerging market bourses that take their cues from U.S. stock indexes. The gains show that investors remain eager to back AI, one of the most powerful growth themes in the market, even as the inflation outlook remains murky due to uncertainty over oil prices and tensions in the Middle East. "When you tell a market that you're going to spend a trillion dollars over the next few years in an industry, inflation prints don't matter for that industry," said Bill Mann, chief investment strategist at Motley Fool Asset Management, referring to the vast sums companies have committed to AI spending.

AI euphoria powers emerging market stocks' best week since June

Other emerging market currencies and policy updates

South Korea, Taiwan and China lead Asia market moves

Emerging market stocks and currencies post weekly gains

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