Emerging markets are rising again. Money is moving into selected markets and sectors while avoiding the areas most exposed to renewed pressure from the conflict in the Middle East.
The immediate driver is a mix of bargain-hunting and hopes that the conflict may not worsen further in the near term. That has been enough to lift emerging market stocks for a third straight session. Even so, the market is not treating all emerging economies the same. Capital is moving towards places with clearer earnings support, stronger market leadership or more defensible external positions, and away from those facing the biggest energy and currency risks.
Taiwan and South Korea stand out because technology shares are doing the heavy lifting. That matters because it shows that earnings exposure still counts, even when macro headlines are dominating the market. In a tense geopolitical backdrop, markets with recognised technology leadership can still attract demand if the profit outlook and strategic relevance remain intact.
Central Europe is also participating in the rebound. Poland and Hungary have seen gains in both equities and currencies, despite an uncertain political backdrop.
Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.
