EMERGING MARKETS-EM stocks advance while investors monitor Venezuela gambit

By Twesha Dikshit and Ragini Mathur

(Reuters) - Emerging market equities advanced on Monday, with investors assessing fresh geopolitical risks after the U.S. seized Venezuelan President Nicolas Maduro, a move that caused a jump in safe haven assets but had little impact on investors' overall appetite for risk.

U.S. President Donald Trump told reporters on Sunday that he could order another strike if Venezuela did not cooperate with U.S. efforts to open up its oil industry and stop drug trafficking.

Venezuela's international government bonds advanced as much as 7.5 cents to almost 38.8 cents on the dollar, TradeWeb data showed.

Venezuela's state-run oil company PDVSA started cutting crude production after running out of storage capacity due to the ongoing U.S. oil blockade that has reduced exports to zero.

"Venezuela's impact on the oil price is limited because its share of global output is so small and the lead time to develop its huge reserves is very long and may not even make economic sense at current prices," said Hasnain Malik, EM equity and geopolitics strategist at Tellimer.

Meanwhile, JPMorgan analysts expect a rally of up to 10 points in the country's international debt on Monday. Shares of Emerging Markets Fund Manager Ashmore ASHM.L, a significant Venezuelan debt holder, surged more than 12%.

The MSCI emerging market stock index .MSCIEF was up 1.3%, after briefly touching a record high earlier in the session. The corresponding currency gauge .MIEM00000CUS was little changed.

AI OPTIMISM, DATA IN FOCUS IN OTHER EM REGIONS

In Turkey, annual inflation dipped to 30.89% in December, slightly below expectations, official data showed on Monday, setting up the case for interest rate cuts to continue.

The benchmark equity index .XU100 added 1.1% while the lira TRY= was flat against the dollar.

Hungarian equities .BUX gained 1.8% while the forint EURHUF= dropped 0.8% against the euro. The country's seasonally-adjusted Purchasing Managers' Index rose to 53.7 in December, exceeding the average for the month in the past three years.

In Asia, stocks were buoyed with AI optimism, outweighing geopolitical concerns. Taiwan's equities .TWII rose 2.6%, crossing the 30,000 points milestone.

South Korea's benchmark index .KS11 jumped 3.4%. Top economic policymakers in the country pledged efforts to stabilise the currency market.

Chinese stocks rallied on their first trading session of 2026 with the blue-chip CSI300 index .CSI300 adding 1.9%, while the Shanghai Composite index .SSEC gained 1.4%.

Investors will shift attention to LatAm assets later in the day. ING's Global Head of Markets Chris Turner said in a note that currencies of left-leaning governments in the region, such as Colombia and Mexico, might come under pressure with the latter used as a proxy for LatAm risk.

For TOP NEWS across emerging markets nTOPEMRG

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB