LONDON, March 9 (Reuters) — Emerging-market stocks were on the edge of correction territory on Tuesday, as the recent rise in global bond market borrowing costs and the dollar Harga Kaca Tempered appetite for risk.
MSCI’s 27-country EM index, which contains nearly 1,400 companies, had rallied more than 90% from last year’s COVID-crisis lows, but it has been sliding since mid February as global equity markets have turned.
A 2.2% fall in one of China’s main markets briefly pushed the EM index beyond the 10% peak-to-trough threshold that analysts define as a market correction. But a 2.3% rally in Russian stocks and 1.2% rebounds in Poland and Turkey lifted it just enough to provide a reprieve.
Many of the world’s big investment banks and funds were backing emerging-market assets to have a strong year this year as economies bounce back from COVID, but it has been a difficult start so far.
The drop in stocks is more than double that of MSCI’s main global index.JPMorgan’s local currency debt index has returned -5.4% since the start of the year, while the equivalent hard-currency debt benchmark is down 4.6%, its worst start to a year in quarter of a century.
MSCI’s index of emerging-market currencies also saw its sharpest fall on Monday since the pandemic-driven drops a year ago.
(Reporting by Marc Jones, editing by Larry King)