A closely watched measure of emerging market stocks is tipping into correction territory, a culmination of uncertainty over US trade policy and concerns about the outlook for China’s economic growth.
The MSCI EM index closed 0.4 percent lower on Thursday at a four-month low of 1,066.47. That took the reading’s drop since October in nearly 20 months above 10 percent, the threshold for a correction.
Emerging market stocks came under pressure in the final quarter of 2024 as Donald Trump won the US presidential election and traders worried about the negative effects his proposed tariffs and other policies could have on the country’s trading partners.
Chinese stocks have sold off in recent months not only because of the potential impact of US tariffs, but also because Beijing’s economic stimulus package has failed to meet investors’ expectations. At more than 27 percent, Chinese stocks represent the largest individual country weighting in the MSCI EM index.
