Global Tensions and Central Bank Moves Rattle Emerging Markets
Emerging market stocks were pressured due to fears of U.S. involvement in the Iran-Israel conflict and impending interest rate decisions from central banks. While the MSCI emerging market index fell, Israeli stocks showed resilience gaining 0.2%. U.S. Federal Reserve's anticipated rate decision and central banks in Indonesia, Czech, and Hungary influenced regional markets.
Emerging market stocks faced downward pressure on Wednesday amid heightened geopolitical tensions, especially concerns about potential U.S. involvement in the Iran-Israel conflict. The MSCI index for emerging market equities dropped 0.4%, while its currency index slipped 0.2%.
The Middle East conflict, which entered its sixth day, saw renewed missile strikes between Iran and Israel, following U.S. President Donald Trump's call for Tehran's surrender. Despite regional unrest, Israel's Tel Aviv 35 index showed resilience, gaining 0.2%.
Global defense stocks experienced significant surges, climbing nearly 90%, while gold also saw an uptick of around 85%. As central banks make crucial interest rate decisions, the U.S. Federal Reserve is expected to maintain its rates. Economic sectors across Indonesia and Central Europe reacted variably to local bank policies, influencing currency and stock movements.
(With inputs from agencies.)
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