The emerging Asia region was a key driver of performance, led by notable advances from China and Korea. The MSCI China index saw a robust 4.8% uptick, while neighbouring Korea posted a solid 4.0% gain, outperforming both EM and DM counterparts. China benefitted from improved sentiment, while Korea was bolstered by a positive trade agreement with the US. On 30 July. US President Donald Trump announced a new trade deal with South Korea, which called for 15% tariffs on exports, after the country scrambled to secure an agreement ahead of a 1 August deadline. In addition to lower tariffs, South Korea also pledged to invest $350 billion in the US.

In China, optimism was fuelled by progress in US-China trade discussions and the so-called “anti-involution” trade, with the US allowing select AI-chip exports to China to resume. Economic data supported the recovery narrative as July exports rose 7.2% year-on-year in USD terms, sharply beating expectations, while imports grew by 4.1%, the strongest gain since July 2024. However, not all indicators were positive. Manufacturing activity unexpectedly slipped to a three-month low in the month, with the Caixin general manufacturing PMI falling to 49.5 from June’s 50.4, missing forecasts of 50.2. The decline was driven by a sharper drop in new export orders, highlighting the persistent drag from global trade uncertainty.

Thailand emerged as the month’s top performer while tech-heavy Taiwan attracted substantial foreign inflows amid persistent investor enthusiasm over artificial intelligence. Foreign investors injected more than $7.78 billion into Taiwan, its highest monthly inflow in nearly two decades. Furthermore, on 30 July, while Korea secured a favourable trade deal with the US, President Trump announced a 25% tariff on Indian exports, along with an additional penalty tied to India’s purchases of oil and weapons from Russia. The Indian SENSEX index ultimately ranked among the worst-performing major indices in July.

In Latin America, Brazil’s equity market struggled after the US raised tariffs on exports to 50%, a sharp increase from the 10% set in April, a move linked to the “witch-hunt” trial of former president, Jair Bolsonaro. Mexico also faced a 25% tariff on its exports to the US, experiencing additional pressure following a disappointing earnings report from a major listed retailer, which suffered its steepest single-day share price drop since 2020.

Elsewhere, Poland and South Africa recorded modest gains while Saudi Arabia ended the month lower, in US dollar terms.