A closely watched measure of emerging market stocks slid into correction territory, a culmination of uncertainty over U.S. trade policies and concerns about China’s economic growth outlook.
The MSCI Emerging Markets Index closed 0.4 percent lower on Thursday at a four-month low of 1,066.47. This has led to a decline in the measure since its highest level in October in 20 months by approximately 10 percent, the threshold for a correction.
Emerging market stocks came under pressure in the fourth quarter of 2024 as Donald Trump won the US presidential election and traders worried about the negative impact proposed tariffs and other policies could have on the country’s trading partners.
Chinese stocks have seen heavy selling in recent months, not only because of the potential impact of US tariffs, but also because Beijing’s economic stimulus package fell short of investors’ expectations. At more than 27 percent, Chinese stocks represent the largest single country weighting in the MSCI Emerging Markets Index.
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