Global funds came back to emerging markets in April with an inflow of US$58.3 billion, which is expected to continue in coming months amid the recovery from the previous geopolitical panic.

It comes as the reignited enthusiasm in AI has started drawing some global funds back to US stocks, but analysts said mainland and Hong Kong markets may benefit from the upcoming Trump-Xi meeting.

According to a report by the Institute of International Finance (IIF), the April non-resident portfolio growth in emerging countries – varying from China to Brazil – rebounded sharply, reversing the outflow of US$66.2 billion in March and US$42.2 billion in April last year.

The swing indicated that investors were willing to re-engage quickly once the initial geopolitical panic faded and primary market windows reopened, Jonathan Fortun, senior economist at the Institute of International Finance (IIF), said in a note on Monday.

“With the ease of Middle Eastern conflicts, global markets [are] likely to further recover,” Kenny Ng Lai-yin, a strategist at Everbright Securities International, said. “The emerging markets will even be able to sustain their upwards momentum.”

The capital inflow in April was recorded in both stocks and credit. IIF recorded an influx of US$6.4 billion in equity markets and US$51.9 billion from debts, versus an outflow of US$65.5 billion and US$700 million last month respectively.