A widely watched indicator of emerging markets stocks has entered correction territory, driven by uncertainty surrounding US trade policies and concerns about the Chinese economy’s future.
The MSCI EM index closed at a four-month low of 1,066.47 on Thursday, marking a 10% drop from October’s almost 20-month high and meeting the criteria for a correction.
In the final quarter of 2024, emerging markets stocks faced pressure following Donald Trump’s US presidential election victory and concerns about the impact of his proposed tariffs on trading partners.
Chinese equities have been on the decline recently not only due to US tariffs but also because Beijing’s economic stimulus package didn’t meet investor expectations. With more than 27% weighting, Chinese stocks are the largest in the MSCI EM index.
