EM stocks rally as Alibaba surges on AI revenue boost

A gauge tracking emerging-market equities rallied on Monday amid thin liquidity due to a US holiday, boosted by artificial intelligence-related stocks in Hong Kong and China after Alibaba Group reported a surge in revenue from AI.

The MSCI EM Index rose 0.7% as Alibaba jumped 19% in Hong Kong - the most in three years - after the Chinese e-commerce giant reported a triple-digit percentage gain in AI-related product revenue as well as a better-than-anticipated 26% jump in sales from the cloud division.

The rally marks a break from last week's broader Asian market decline after a tech selloff hit Wall Street. The MSCI EM currency gauge was little changed with the Labor Day holiday in the US trimming liquidity. The rupiah rose the most against the dollar in Asia after Bank Indonesia stepped in to defend the currency following political unrest over the weekend.