Emerging market equities record best monthly performance since 2022 as AI boom and oil price risks intertwine

The MSCI Emerging Markets Index rose by 14.5% in April, recovering the losses experienced after the outbreak of war. This increase "appears to be more than just a short-covering rally," said Malcolm Dorson, Senior Portfolio Manager at Global X Management. "We still believe there is further upside potential." Despite the rebound, emerging market equities remain inexpensive relative to the US market. Earlier this year, analysts raised their earnings expectations for emerging market companies by 30%, significantly higher than the average increase of around 10% for the S&P 500 Index. On Thursday, risk sentiment was mixed: emerging market equities fell by 1.1%, while most currencies strengthened against the US dollar. Although crude oil prices pulled back from a four-year high, they remained above $110 per barrel, and the market still fears a possible escalation of the Iran conflict.