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Emerging markets jittery ahead of key meetings
June 12, 2016, 6:36 pm

Emerging markets from Dubai to Mexico suffered drawbacks ahead of the Fed's meeting on interest rates this week [Xinhua]

Emerging markets from Dubai to Mexico suffered drawbacks ahead of the Fed’s meeting on interest rates this week [Xinhua]

Markets in emerging economies will likely open jittery on Monday as global investors await a June 14-15 meeting of the US Federal Open Market Committee to discuss the possibility of interest rate hikes this summer.

Any strong indication that the Fed will hike rates is likely to increase capital outflow (a selloff) from emerging markets, mimicking the exit of tens of billions of dollars after the US ended its quantitative easing stimulus program in 2014.

Analysts are also waiting to see the outcome of Britain’s referendum on its relationship with the EU (or Brexit) on June 23.

While surveys appear to indicate that the vote may be too close to call, a Brexit will likely bring European stocks down, some analysts predict.

Markets are also bracing for the uncertainty around the annual MSCI annual market-classification review which is due to be released on Tuesday.

Every year, MSCI examines and reassesses (or reclassifies) risks and performance in emerging and developed markets and is seen as a valuable gauge of investment health.

On Sunday, when markets are traditionally open for business in some North African and Middle East countries, trade dipped in most indices from Egypt to Saudi Arabia and the United Arab Emirates – led largely a dip in real estate stocks.

Arab stocks seem to have taken a hint from Latin American stocks and currencies which dipped significantly at closing on Friday and largely to the same fears and market uncertainties.

More on tough times ahead for Emerging Markets.

The BRICS Post with inputs from Agencies

One Response to Emerging markets jittery ahead of key meetings

  1. HelenaH Reply

    June 12, 2016 at 6:52 pm

    Hello from England – we are definitely all going to vote Leave. We just had the Queen’s 90th birthday celebrations on the Mall – people were waiting for a message of guidance and I think they got it. We are so looking forward to embracing the rest of the world more and especially our Commonwealth.

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