Chinese equities continued to lead emerging markets, with the MSCI China Index climbing 9.8% for the month, bringing year-to-date return to 41.6%. Market sentiment was buoyed by ongoing enthusiasm around artificial intelligence (AI), as major technology firms launched new AI-driven products, reinforcing confidence in corporate capital expenditure. The government’s continued push to strengthen its domestic semiconductor industry provided further support to the sector.  

India lagged behind EM peers, with the MSCI India Index inching up just 0.5% in September. The country’s trade data reflected growing external pressures as exports to the United States (India’s largest trading partner) fell sharply by 20% in September and nearly 40% over the past four months. The decline followed the imposition of steep US tariffs under President Trump’s trade policies. The full impact of the 50% tariffs, which took effect on 27 August, became evident during the month, compounded by an additional 25% penalty linked to India’s ongoing purchases of Russian oil. As a result, India’s shipments to the US have declined for four consecutive months, dropping 38% from $8.8 billion in May to $5.5 billion in September. The contraction in exports contributed to a widening trade deficit, which reached a 13-month high of $32.2 billion. However, part of the shortfall was offset by improved trade activity with markets such as the UAE and China. Trade negotiations between New Delhi and Washington continued in September, led by Trade Minister Piyush Goyal, but no breakthrough was announced following the minister’s visit. At the time of Goyal’s visit, key sticking points included tariffs, market access for agricultural and dairy products, and visa fees for Indian professionals. 

In Latin America, equities posted strong monthly gains, with the MSCI EM Latin America Index advancing 6.6%. Regional markets demonstrated resilience despite global volatility, although performance varied across countries. Brazil led the region’s rally, supported by a softer US dollar, expectations of monetary easing in 2026, and attractive equity valuations. The country benefited from rising foreign direct investment inflows and an appreciating real, while Mexico’s economy remained resilient despite pressure from US trade tariffs. Argentina continued its cautious path toward macroeconomic stabilisation amid lingering vulnerabilities. Chile and Peru benefited from elevated copper prices, underscoring the region’s continued leverage to global commodity trends. 

Taiwan’s equity market remained a key beneficiary of the global AI cycle, supported by strong demand for semiconductors and AI-related hardware. The broader backdrop also improved following the US Federal Reserve’s 25-basis-point rate cut, which reinforced risk sentiment across emerging markets.