Emerging market stocks hit record on Iran deal hopes, AI rally

Emerging Market Stocks Hit Record High on US-Iran Peace Progress

Emerging-market stocks climbed to a historic high on Monday as progress in US-Iran peace negotiations and a global surge in artificial intelligence investment combined to lift developing-world equities. The MSCI Emerging Markets Index rose as much as 1.3% to an all-time high, while crude oil prices slid below $80 per barrel on optimism that a final peace deal could end the conflict that has roiled global markets since February.moneycontrol

The gains came as mediators said the US and Iran had made “encouraging progress” on a peace deal and would continue technical-level talks this week. The two nations signed a memorandum of understanding on June 17 that established a 60-day ceasefire and committed to reopening the Strait of Hormuz, a critical chokepoint for global energy supplies.apnews

South Korea Leads the Rally

South Korea’s Kospi surged as much as 2.2% before closing at a record 9,114.60, surpassing the previous high set just two trading days earlier. The rally was led by SK Hynix, which jumped as much as 6.5% and closed up 5.6% at a record high of 2,919,000 won. The memory chipmaker overtook Samsung Electronics as South Korea’s most valuable listed company by common-share market capitalization for the first time in 27 years.chosun

Analysts have been lifting price targets on SK Hynix ahead of its planned listing of American depositary receipts on U.S. markets. The company filed a confidential registration with the SEC in March and is targeting a listing within 2026, in a deal that could raise as much as $14 billion.chosun

China Bucks the Trend

Chinese equities listed in Hong Kong bucked the broader rally. The Hang Seng China Enterprises Index fell over 1% on Monday, weighed down by weak consumption data. China saw its first drop in consumer spending since the pandemic era, according to Bloomberg, as sluggish earnings growth and declining liquidity continue to pressure offshore indices heavily reliant on consumer-facing sectors.reuters

The divergence underscores a broader rotation underway in emerging markets, with investors favoring semiconductor manufacturers and AI supply-chain companies over China’s internet and consumer firms. A gauge of Chinese shares in Hong Kong has dropped nearly 9% this year, ranking among the worst performers of more than 90 global equity indices.yahoo

The US-Iran framework agreement, signed at Switzerland’s Burgenstock resort, commits both sides to a permanent cessation of hostilities across all fronts, including Lebanon, and envisions at least $300 billion for Iran’s reconstruction. Substantive negotiations on Iran’s nuclear program and full sanctions relief are set to take place over the 60-day ceasefire period.reuters