A closely-watched gauge of emerging market shares returned to correction territory, the height of uncertainty over US trade policies and concerns about the outlook for Chinese economic growth.
The MSCI EM index closed 0.4 percent lower on Thursday at a four-month low of 1,066.47. That sent the gauge falling from October’s nearly 20-month high beyond 10 percent, the threshold for a correction.
Emerging market shares came under pressure in the final quarter of 2024 after Donald Trump won the US presidential election and traders worried about the negative effect 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 did not meet investors’ expectations. At more than 27 percent, Chinese stocks represent the largest single country weighting in the MSCI EM index.
