Emerging Markets Surge Amid Russia-Ukraine Talks and Economic Policy Decisions

Emerging market stocks rose, influenced by Wall Street gains and Russia-Ukraine peace talks. The rouble hit an eight-month high as U.S. and Russian leaders prepared for dialogue. Meanwhile, EM stocks outperformed as central banks prepared for interest rate decisions, showing resilience against the backdrop of fluctuating U.S. trade policies.

Emerging market stocks witnessed an uptick on Tuesday, largely influenced by overnight gains on Wall Street. Attention was focused on the upcoming peace talks between the U.S. and Russia regarding the ongoing conflict in Ukraine, as well as several critical interest rate announcements expected later in the week.

The Russian rouble soared to a more than eight-month high ahead of discussions between U.S. President Donald Trump and Russian President Vladimir Putin. Analysts suggest that any favorable progress in the talks, potentially leading Russia to agree to a ceasefire, could impact the strength of the U.S. dollar, which has been affected by volatile trade policies.

Emerging market currencies have prospered amid the dollar's decline, with MSCI's index for EM currencies seeing a notable rise. Meanwhile, the U.S. Federal Reserve's upcoming interest rate decision has markets on edge, especially as trade tensions and fears of economic slowdown suggest potential easing of policy by year-end. Amidst these developments, EM stocks have performed robustly, surpassing the U.S. S&P 500's growth in March.

(With inputs from agencies.)