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2011 hasn't been a great year for emerging stock markets so far
02/03/2011 3:50 pm EST
How bad has it been exactly?
China is one of the best performers, down just 2.5% in dollar terms from January 1 through January 28, quite possibly because Chinese markets fell so much in 2010. Next best performer among emerging markets? Brazil, where stocks were down 5.5%. It just gets worse from there. Indonesia down 8%. Chile down 10.2%. Turkey down 10.8%. South Africa down 11.8%. India down 12.4%.
Russia bucked the trend with the ruble up 2.7% against the U.S. dollar and Russian stocks in dollar terms up 6.1%.
So when will these markets rally?
I’d look for a rally in emerging markets when/if the Egyptian crisis reaches some kind of stable state.
But I think the downward pressure from inflation and interest rate worries will limit that rally and keep these markets under pressure for a while yet. The middle of the year seems like a reasonable time to start looking for a turn in these markets.
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