Emerging Markets Face Turmoil Amid Central Bank Decisions and Tariff Threats
Emerging Market assets saw losses amid central bank decisions and President Trump's tariff threats. The MSCI index dropped 1.4%, influenced by new tariffs, including on branded drugs. Hungarian and Czech currencies faced challenges, while local elections and economic policies in Central Europe added pressure to market sentiment.
Emerging Market assets appeared headed for a week of losses on Friday. This downturn followed a series of regional central bank decisions and new tariff threats from U.S. President Donald Trump. Investors opted to book profits amid an environment dominated by caution.
The MSCI index—a key measure of emerging market equities—experienced a 1.4% decline, marking its most significant single-day drop since April 7. It also signaled the first weekly loss in four weeks. According to Marija Veitmane, global head of Equity Strategy at State Street Markets, while corrections were anticipated, previous equity performance had been strong.
The market reaction was fueled by fears surrounding potential new import tariffs announced by Trump, notably 100% duties on branded drugs. Furthermore, regional currencies faced pressure, with a key measure declining by 0.2%, facing its longest streak of decreases in over two months. This risk-averse sentiment further influenced various markets, including those in Hungary and the Czech Republic.
(With inputs from agencies.)
Google News