The financial markets in Q3 2024 displayed steady performance worldwide, driven by regional economic factors and central bank actions. Inflation remained stable, prompting rate cuts by several central banks, notably the U.S. Federal Reserve, fostering a favorable environment for equities.

Amid these rate cuts, emerging markets experienced a boost as lower financing costs and a weakening dollar attracted investors to an area of the market that had been overlooked. This surge in emerging market equities, as reflected in MSCI indices, surpassed the performance of developed markets by 2.4%, with variations across regions reflecting local economic conditions and investor sentiment.

China emerged as a standout performer during the quarter, with the equity market witnessing a significant upswing following the announcement of stimulus measures by the PBOC to stabilize the real estate sector and stimulate the broader economy. The MSCI China index surged by 21.7%, showcasing a remarkable turnaround in performance.

Brazil also experienced positive growth in its equity markets, driven by strong investor confidence, particularly in sectors like financials and energy. However, concerns over inflation and currency stability tempered the overall performance, despite a 7.3% rise in equity markets for the quarter.

South Africa saw notable gains in the industrial metals and technology sectors, leading to a 16.14% increase in the MSCI South Africa index in USD terms. The country’s decision to implement its first rate cut since the pandemic, following the Fed’s lead, further supported equity gains, although some sectors like chemicals and healthcare lagged behind.

India maintained a steady upward trajectory, with the MSCI India index rising by 7.4%. Sectors like information technology and financials showed resilience, while investor interest remained strong on expectations of further fiscal reforms, highlighting India’s robust growth outlook.

Mexico, on the other hand, witnessed a moderation in its equity market performance from the previous year’s highs, with the MSCI index falling by 3.3%. Despite inflationary pressures, a stable peso and a resilient economy continued to position Mexico as a strategic investment destination amidst North American trade integration trends.

The resilience of emerging markets, coupled with proactive fiscal support from China and the easing stance of the U.S. Fed, underscored the optimism surrounding these markets. Despite varying performances across countries, emerging markets remain poised for growth as they adapt to global monetary policy shifts and domestic reform agendas, presenting investment opportunities amidst a backdrop of continued dollar weakness.