Emerging markets hit the largest single -day decline in 6 months on Wednesday and entered the bear market area. Due to the rapid decline in commodity prices, exchange rate turbulence, and the performance of a Chinese technology giant, it was disappointing, making investors worry.
Although the lira rebounded in Turkey's short -selling currency in Turkey, the FTSE EMERGING Markets Index that tracked stock performance in developing countries fell by 2.2%on Wednesday.This caused the index to fall more than 20%of Andmdash; Andmdash; 20%of the decline of the market is usually the definition of the market in the bear market.
In the past few months, the pressure on emerging markets has increased day by day.The worry about the trade war has produced a serious dragging effect, while the US interest rate hikes and the US dollar rebound weakened the attractiveness of emerging markets, and to a certain extent caused a relatively fragile national crisis that rely on capital inflows such as Argentina and Turkey.
Tencent, one of the three major technology giants in China, released downturn performance, which made this round of decline.Chinese tertiary giants BAIDU (BAIDU), Alibaba and Tencent are collectively known as And "Batandrdquo; (these three large Internet group names of the English first letters are BAT, in English the meaning of" bat andrdquo;Andmdash; Andmdash; Translator Note).Tencent's performance dragged down the Asian market and even infected into the US technology stock sector.
Tencent is the largest component stock in the FTSE Emerging Market Index.The company reported that at least 10 years of profit decline, which led to a sharp decline in stocks listed in the United States, the largest single -day decline in five months, down to the lowest level in the past year.Baidu and Alibaba's listed stocks in the United States fell 2.3%and 3.5%, respectively, both reached a year low.
At the same time that China's three major technology stocks have declined, China's largest and most influential development of economies in other fields has also exacerbated.The CSI 300 Index (CSI 300 Index) has fallen 18%so far this year, as investors are increasingly worried about slowing economic growth and Sino -US trade disputes.
And "China has endured this huge pressure throughout the year this year. This round (selling technology stocks) is the latest chapter of this story that has been lasting for several months. Andrdquo;Kristina Hooper said.
On Wednesday, the offshore RMB, which traded in major trading centers abroad, was once again created in New York's transactions, showing the market's concerns about China.The exchange rate of the RMB against the US dollar fell 0.66%on that day, to the lowest level since January 2017, which was 1 USD at 6.9487 yuan.
Capital Economics emphasized that Chinese economic data has recently weakened and pointed out that this is at least as intensified as an increasingly intensified trade tension.
And "these adversity means that the Chinese economy will continue to slow down this year. This is why we think that no matter how the Turkish situation evolves, emerging market assets will still struggle, and Andrdquo; this research institution wrote on Wednesday.
Emerging market currencies and bonds have also suffered further blows.After the Turkish government took measures to limit investors' ability to short, the lira rebounded by the US dollar exchange rate by more than 5%. However, almost all other major emerging market currencies fell on Wednesday.
The commodity market of emerging economies, as a major source of demand, also fell sharply on Wednesday.
Translator/He Li
