Emerging Market Stocks Stagnate Amid Economic Uncertainty

Emerging market stocks remained stable as investors awaited crucial economic data. The Russian rouble weakened significantly against the dollar amid intensifying conflict with Ukraine. U.S. and Chinese economic indicators, expected this week, are crucial for market forecasts. Israel's credit rating was downgraded due to geopolitical risks.

Emerging market stocks showed little movement on Tuesday as investors awaited significant economic data, which could provide insights into the health of the world's largest economies. Amid escalating conflict with Ukraine, the Russian rouble weakened, sliding past 92 per dollar for the first time in three months.

The rouble has lost nearly 9% against the dollar and around 9.5% against the euro since Ukraine's Aug. 6 incursion, according to LSEG data. Attention now shifts to U.S. inflation data expected on Wednesday. This data could hint at a larger-than-usual interest rate cut by the Federal Reserve in its upcoming September meeting, potentially boosting emerging market assets.

MSCI's index of emerging market stocks and the broader EM currency index showed minimal change. Additional economic reports from the U.S., China, and Europe this week will be pivotal for market direction. Notably, Fitch downgraded Israel's credit rating due to escalating geopolitical tensions, affecting its assets. The Hungarian forint led regional currency gains in Europe, while South Africa's rand strengthened ahead of employment and mining data.

(With inputs from agencies.)