Stocks down 0.2%, currencies flat
South Africa’s rand gains amid rising inflation and gold prices
Investors await Trump’s Davos speech for potential de-escalation signals
By Ragini Mathur
Jan 21 (Reuters) - Emerging market equities edged lower on Wednesday as geopolitical and tariff risks over U.S. threats to acquire Greenland continue to weigh on sentiment, while investors awaited President Donald Trump’s address in Davos. Trump intensified his rhetoric over Greenland on Tuesday, declaring there was “no going back” on his ambition to control the island and refusing to rule out military force.
His threat of sweeping tariffs on Europe has further stoked fears of a widening global trade war, placing the transatlantic alliance under strain. All eyes have turned to Davos, where investors are clinging to hopes that Trump’s speech might signal a de-escalation.
“The Greenland chaos will remain the main course of the week and will be served again today, as Donald Trump prepares to rock the boat in Davos,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
”…there is a greater chance that the two sides of the Atlantic will not reach an agreement on Greenland in a single day… here, we are talking about an issue that could mark the beginning of the end for NATO.”
MARKETS REFLECT UNCERTAINTY The uncertainty weighed on risk assets. The MSCI emerging markets stock index (.MSCIEF) fell 0.2%, though the corresponding currencies index (.MIEM00000CUS) held relatively steady.
The pullback marks a reversal from the strong start to 2026, when emerging market benchmarks notched record highs before Trump’s Greenland threats rattled global investors.
Across emerging Europe, the Hungarian forint (EURHUF=) weakened 0.2% against the euro, while Budapest’s benchmark index (.BUX) declined 0.3%.
Czech stocks (.PX) dropped 0.5% with the koruna (EURCZK=) slipping 0.1%, and Poland’s WIG20 index (.WIG20) fell 0.4%, though the zloty (EURPLN=) held flat.
Turkey’s main index (.XU100) also retreated 1%.
In contrast, South Africa’s rand (ZAR=) gained ground against the dollar, rising 0.3%, after consumer href=“nL8N3YM0EZ” target=“_blank” rel=“noopener”
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<li>inflation accelerated to 3.6% year-on-year in December, meeting analysts’ expectations. Surging gold prices provided additional support. The country’s benchmark stock index (.JTOPI) gained 0.2%.</li>
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Meanwhile, the rout in global bond markets showed signs of easing on the day, offering some respite to investors caught between concerns over U.S. asset exposure and surging Japanese government borrowing costs. Elsewhere, EU lawmakers will vote on Wednesday on whether to challenge the European Union’s contentious free-trade agreement with South America in the bloc’s top court, a move that could delay the deal by two years and potentially derail it.
The landmark pact with Argentina, Brazil, Paraguay, and Uruguay, signed on Saturday, still requires parliamentary approval before taking effect.
For TOP NEWS across emerging markets
For CENTRAL EUROPE market report, see (CEE/)
For TURKISH market report, see (.IS)
For RUSSIAN market report, see (RU/RUB)

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Emerging market equities fell 0.2% as geopolitical risks, particularly U.S. threats regarding Greenland, weighed on investor sentiment. Investors are awaiting President Trump's speech at Davos for potential de-escalation signals. The uncertainty has impacted risk assets, with various European currencies and stock indices declining. However, South Africa's rand gained 0.3% amid rising inflation and gold prices. Meanwhile, EU lawmakers are set to vote on a free-trade agreement with South America, which could face delays.

Reuters

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EMERGING MARKETS-EM equities slip as investors weigh geopolitical risks ahead of Trump's Davos speech