Emerging Markets Surge Amid Chinese Growth Ambitions and Global Trade Dynamics

Emerging market stocks rose sharply on Wednesday following China's ambitious economic growth targets and promises of fiscal stimulus. However, trade war tensions persisted, influenced by U.S.-China tariffs. Meanwhile, global markets watched President Trump's policies closely, particularly his trade strategy and its implications for financial markets.

On Wednesday, emerging market stocks demonstrated a notable rise, triggered by China's declaration of new economic growth objectives and significant fiscal stimulus promises. Chinese shares showed a substantial increase as Beijing's economic policy became a focal point for investors. This development comes amidst ongoing assessments of trade war risks, particularly following recent U.S. tariffs.

In an anticipated policy move, Premier Li Qiang set a growth target of roughly 5% for 2025, alongside a larger budget deficit. These plans surfaced following a Reuters report from December, although experts warn that U.S. tariffs and persistent economic challenges could hinder China's efforts to meet these targets. In a significant move, Li emphasized AI advancement, boosting Chinese AI stocks by 1.4%.

Across Europe, Ukraine's international bonds rallied following U.S. President Donald Trump's acknowledgment of Ukraine's readiness for peace talks with Russia. Despite global sell-offs, prompted by Trump's newly imposed tariffs on Mexico and Canada, markets saw slight relief on the prospect of trade concessions. The Mexican peso, along with emerging market currencies, gained amidst dollar weakness, with global attention now on forthcoming U.S. job data and potential Federal Reserve policy shifts.

(With inputs from agencies.)