Affected by the spillover effects brought about by the strong performance of US tech giants, the benchmark index tracking many emerging market stock markets recorded the best weekly performance since July 2023. Among them, the one with a high weight in the Hong Kong stock market$TENCENT (00700.HK)$versus$BABA-SW (09988.HK)$It contributed the most to the rise in this benchmark index.$Taiwan Semiconductor (TSM.US)$Then it followed. According to the data, the benchmark stock index for emerging markets ended the collective closing of the Asian stock market on Friday, the biggest weekly gain in nine months. US corporate financial reports confirmed the extreme demand for generative AI technology by global companies, and technology stocks in the Asian stock market were generally boosted.

$Alphabet-A (GOOGL.US)$versus$Microsoft (MSFT.US)$The financial reports of these two major US tech giants have boosted investors' bullish sentiment about Asian tech companies globally. According to the data, the MSCI Emerging Markets Index (MSCI Emerging Markets Index), the benchmark index for emerging markets, rose 1.1% in a single day as of the Asian stock market closing on Friday, the highest point in two weeks, and recorded the biggest weekly gain in 9 months with a weekly increase of close to 4%. Tencent, Alibaba, and TSMC contributed the most to the increase.

Judging from market risk appetite, after the US market on Thursday, the two giants, Microsoft and Google, surpassed expectations and achieved significant growth in performance indicators across the board, reviving the “AI belief” of global technology stock investors. Tech stock investors' fanaticism about AI may once again set off huge waves in global stock markets. However, the bullish heatwave caused by AI stocks is critical to the stock prices of Internet technology giants such as Alibaba and Tencent, which have high weight in Hong Kong stocks, as well as the trend of technology stocks such as TSMC, MediaTek, and Hon Hai, which have high weight in Taiwanese stocks.

After a week of extremely strong gains, the MSCI Emerging Markets Index is about to erase the sharp monthly decline previously caused by the market due to a sharp drop in expectations of the Federal Reserve's interest rate cuts and a resurgence of concerns about rising US inflation. Among them, the Hong Kong Stock Benchmark Index —$Hang Seng Index (800000.HK)$The index broke through the 200-day moving average on Friday, with a sharp increase in trading volume and strong momentum since 2011, which is a very strong bullish sign.

Although macroeconomic risks such as a general slowdown in economic growth in the Asian region and the Federal Reserve's hawkish monetary policy expectations continue to put pressure on emerging market stock markets, the stock market outlook has improved due to the spillover effects of strong profits from US tech giants aided by AI. This helped the Asian stock market perform far better this week than the other two emerging market stocks that have performed well for a long time — Latin America and the EMEA region (Europe, Middle East, and Africa). The overall strong performance of emerging market equities also overshadowed the bond market and foreign exchange market, which took cues from the Federal Reserve's interest rate pricing.

Strong profit reports from US tech giants are encouraging analysts to raise their profit expectations for emerging market companies, especially Internet technology companies in the Hong Kong stock market. Analysts' average 12-month profit expectations for the companies that make up the MSCI Emerging Markets Index have risen to the highest level since September 2022. Strong performance expectations from Asian technology companies such as Tencent, Ali, and TSMC are leading this growth rate.

However, after the Asian stock market rebounded sharply on Friday, the European stock market failed to achieve strong gains in the Asian stock market during the trading session, mainly due to investors waiting low for the US PCE inflation data report for March. The money market has completely postponed the Fed's bet on cutting interest rates for the first time from September to December. Earlier, US GDP data released on Thursday showed that economic growth in the US, the world's largest economy, had slowed beyond expectations, and pressure on core prices remained high.

Editor/Jeffrey