Sri Lanka's debt restructuring deal has had a positive impact on emerging markets, with local stocks nearing a two-year high. The MSCI index has risen, tech-heavy stocks have gained, and India's market has hit record highs. Currencies in emerging markets have appreciated, and crude oil prices remain above $80 a barrel. Sri Lankan bonds have also jumped following the debt restructuring deal [a94d00f8].
The positive sentiment in emerging markets is driven by the hopes for U.S. interest rate cuts and the cooling of the U.S. economy. This has stoked expectations for imminent interest rate cuts by the Federal Reserve. In addition, local price pressures easing in the U.S. have further contributed to the optimism [a94d00f8].
In other emerging markets, Israel's shekel has appreciated, Egypt's pound has firmed, and Turkey's lira has remained flat. Hungary's forint has led gains among peers in central and eastern Europe. China International Capital Corp (CICC) has announced plans to expand its presence in Southeast Asia, indicating positive developments in the region [a94d00f8].
Crude oil prices, which are sensitive to developments in the Middle East, have remained lower but still above $80 a barrel [a94d00f8].