Emerging Markets Rally Amid Fed Rate Cut Hopes

Emerging market currencies saw an uptick on Thursday, fueled by rising expectations of a U.S. Federal Reserve interest rate cut in the coming month, even as Nvidia's earnings left equity markets uncertain.

In China, semiconductor stocks soared by 7.3%, leading to gains in local indices, with the blue-chip index climbing 1.8% and the Shanghai Composite increasing by 1.1%. However, Hong Kong stocks declined by 0.8% during the same period.

Investors weighed Nvidia's performance, which saw its shares fall by 1.6% in U.S. premarket trade, impacting the tech sector globally. Concerns arose over high valuations of Wall Street tech firms, particularly after China's DeepSeek introduced a competitive AI model. Meanwhile, the MSCI gauge for emerging market equities experienced its longest decline in a month as U.S. tariffs affected India's benchmarks, although the rupee remained stable. European stocks made modest gains amid ongoing regional tensions.

(With inputs from agencies.)