Emerging-market stocks headed for the longest streak of losses in almost a year as rising fears of a trade war between the U.S. and China hit Asian tech companies.
The benchmark MSCI EM equity index lost 0.4% in its fifth day of declines, just a week after reaching its highest in two years.
Taiwan Semiconductor Manufacturing Co. fell as much as 4% after former U.S. President Donald Trump questioned whether the U.S. has a duty to defend Taiwan, speaking in a Bloomberg Businessweek interview. The U.S. is also mulling stricter chip curbs on China, Bloomberg News reported, triggering a tech stock selloff as investors pondered the fallout for the world’s largest semiconductor arena.
“With much of the world’s most advanced chip manufacturing capabilities located within Taiwan, sixty-eight miles offshore China, that was not a message the market wanted to hear,” said Steve Clayton, head of equity funds at Hargreaves Lansdown. “Nor did it want to hear the Biden administration talking about tougher trade restrictions against China.”
Asian tech stocks pared losses after TSMC lifted projections for 2024 revenue growth and said quarterly results beat estimates.
Elsewhere, Ukraine’s bonds weakened as the east European country plans to adopt a law allowing the government to impose a moratorium on foreign debt payments. A group of Ukraine’s bondholders has signed non-disclosure agreements to begin a second round of official talks with the government about restructuring more than $20 billion of debt, according to people familiar with the matter.
The government’s dollar bonds maturing in March 2035 fell for the fifth day, trading just under 28 cents on the dollar.
MSCI’s EM currency index was little changed, with the Hungarian forint leading gains. The Indonesian rupiah fell as investors reacted negatively to the nomination of President-elect Prabowo Subianto’s nephew as a deputy finance minister.
This article was provided by Bloomberg News.