J.P.Morgan lifts annual target for MSCI EM equities index on easing trade worries

June 26 (Reuters) - J.P.Morgan raised its year-end price target for emerging market equities benchmark index on Thursday, citing cheaper valuations, a weaker dollar and easing worries over U.S. trade policy.

The Wall Street brokerage raised its price target for the MSCI emerging markets (EM) index .MSCIEF, .dMIEF00000PUS to 1,250 from 1,150, while maintaining its 'overweight' stance.

"The price action in EM year-to-date has been centered on trade tensions, and although tariff rates are likely to remain higher than before, we still see room for positive surprises in EM in H2 2025 as uncertainty fades," the brokerage said.
The benchmark index has gained 13.5% this year as investor confidence in U.S. assets, including safe-haven dollar, fell on concerns over the unpredictability of trade policy under President Donald Trump.

The dollar index .DXY is down 10% this year.

"We see the dollar continuing to weaken while US growth is neither exceptional nor recessionary. Over time this should translate into asset diversification, which, even if small, could do wonders for EM," J.P. Morgan analysts said in a note.

The brokerage expects 19 out of 21 EM countries to cut interest rates in the second half, excluding India and Czechia, citing easing inflation and moderating economic growth outlook.

On the currency front, JPM expects Brazilian real BRL= and Mexican peso MXN= to remain the highest yielding currencies across emerging markets.