By Kerim Karakaya and Jorgelina do Rosario

(Bloomberg) -- Emerging-market equities extended their winning streak for a fourth day, climbing to the highest level since 2021 as artificial intelligence optimism — fueled by a landmark OpenAI share sale — lifted global sentiment.

The MSCI index for EM stocks rose as much as 1.5% on Thursday, led by gains in technology shares including Taiwan Semiconductor Manufacturing Co., Alibaba Group Holding Ltd and Tencent Holdings Ltd. Meanwhile, a gauge tracking EM currencies was little changed.

Marc Bindschaedler, emerging-markets equities specialist at Vontobel Asset Management, noted that China is only at the start of its AI investment cycle, adding that interest in EM stocks is reviving after years in the shadows. Still, he cautioned that momentum-driven rallies can be prone to sharp pullbacks.

Currencies from Poland and Romania led gains in emerging-markets while the Turkish lira underperformed its peers. In bond market, Mozambique and Ghana dollar bonds are among the best performers.

Elsewhere, Citigroup strategists recommended taking profit from the South African rand’s rally. “As the US government shutdown has flowed into our markets as stronger EMFX, the rand has performed fairly well given the cleaner domestic story,” they wrote. “While we take tactical profits at these levels given the short tenor of the trade, our fundamental medium-term view on the currency remains positive.”

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