Emerging Markets Gain Edge with Easing Trade Tensions

J.P. Morgan has adjusted its rating on emerging market equities, elevating it from "neutral" to "overweight" on Monday. This adjustment reflects improvements in U.S.-China trade relations and a decline in the strength of the dollar.

The recent agreement between the U.S. and China to reduce tariffs over a 90-day period has sparked optimism regarding the easing of global trade tensions. These developments have led J.P. Morgan analysts to identify fewer barriers for emerging market stocks, which are further bolstered by the anticipated weakening of the U.S. dollar later this year.

While persistent trade uncertainties remain, J.P. Morgan remains optimistic about opportunities in India, Brazil, and China, especially in technology shares within the latter. Concurrently, the MSCI emerging markets stock index has risen by 9% this year, with a declining dollar indicating a retreat from U.S. assets due to policy concerns.

(With inputs from agencies.)