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Turkey, China Stocks Drag Down Emerging Markets Again

By  +Follow December 19, 2013 1:28PM
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The iShares Emerging Markets Index ETF (EEM) dropped over 1.5 percent on Thursday, showing losses the day after the long-awaited announcement of the tapering of quantitative easing.

However, the downward pressure on global stock markets appears to be driven by factors other than concerns of the Federal Reserve’s policy making. In a story similar to that on Tuesday, it appears as though plunging equities markets in Turkey and China are the greater causes of Thursday’s decline.

Fed Tapers Bond-Buying Program

The decision to roll back the rate at which the Fed would purchase bonds by $10 billion a month to $75 billion a month was announced by Ben Bernanke. He also reassured markets that interest rates would stay at or near zero into the future, even beyond the point where unemployment fell below 6.5 percent.

This news about interest rates, paired with general optimism based on a healthy American economy, is generally being cited as one of the primary factors driving the major spike experienced by American stock markets immediately after Bernanke’s announcement. And EEM joined in that rally, spiking 2 percent in less than 10 minutes after the 2 pm announcement and providing further evidence that the taper announcement is most likely not creating a great deal of downward pressure on global markets.

Turkey’s Saga Continues

The corruption probe in Turkey took on a new tenor Wednesday as 10 police commanders leading the investigation were suspended. News out of Turkey now indicates that the corruption saga could be part of a larger political struggle between an Islamist movement led by cleric Fethullah Gulen, who currently resides in Pennsylvania, and forces within the government including Prime Minister Recep Tayyip Erdogan. The movement is believed to have allies in the police and judiciary, prompting the backlash Wednesday by Erdogan.

Regardless of what lies at the source of the political struggle, it continues to hurt Turkish equities. The iShares MSCI Turkey Index ETF (TUR) fell almost 4.5 percent on Thursday, making losses since Tuesday’s dawn raids that led to the arrest of the sons of three cabinet ministers over 8.5 percent.

China Stocks Decline for Eighth Straight Day

Chinese equities continued a losing streak that appears to have the potential to last two straight weeks as major indicies declined for the eighth consecutive day. China ETFs were down accordingly, with the iShares FTSE China 25 Index ETF (FXI) off almost 2 percent and the iShares MSCI China Index Fund (MCHI) declining over 1.75 percent.

Driving the losses are concerns that China’s crackdown on credit markets will hold back economic growth as the cost of funding increases.

“Liquidity is still tight at the end of the year and there’s still downward pressure due to new stock supply in January,” said Zhang Haidong, an analyst at Tebon Securities Co. in Shanghai. “Until we see concrete evidence that the economy is going to be strong again, the market will remain weak.”

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Results for EEM
Edward
31 Mar 15 13:44:18
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RK
31 Mar 15 13:41:32
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31 Mar 15 13:41:13
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31 Mar 15 13:37:24
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31 Mar 15 13:36:09
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31 Mar 15 13:34:53
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31 Mar 15 13:34:35
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Top ETF Funds
31 Mar 15 13:21:10
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Top ETF Funds
31 Mar 15 13:20:53
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31 Mar 15 13:20:36
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PolgarStocks
31 Mar 15 13:18:08
$EEM Reviews Updated Tuesday, March 31, 2015 4:05:57 PM $PBR $DUST $XHB $XLF http://t.co/y8wOhI8Y7n
Family Investor
31 Mar 15 12:46:41
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Jeffrey Kerr
31 Mar 15 12:41:57
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Eric Parnell, CFA
31 Mar 15 12:38:37
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31 Mar 15 12:33:19
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31 Mar 15 12:16:48
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31 Mar 15 12:10:04
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31 Mar 15 12:02:30
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31 Mar 15 11:58:12
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31 Mar 15 11:44:07
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31 Mar 15 11:21:23
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31 Mar 15 11:17:26
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ML
31 Mar 15 11:17:05
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PolgarStocks
31 Mar 15 11:16:11
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Rosner Stocks
31 Mar 15 11:16:07
$LQD Reviews Updated Tuesday, March 31, 2015 1:59:24 PM $XHB $PVSP $S $EEM http://t.co/clVMuqqWzu
Christian DeHaemer
31 Mar 15 11:15:18
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31 Mar 15 11:13:08
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31 Mar 15 11:13:02
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31 Mar 15 11:06:41
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31 Mar 15 11:03:37
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31 Mar 15 11:02:11
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31 Mar 15 11:00:54
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31 Mar 15 11:00:20
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31 Mar 15 10:58:42
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31 Mar 15 10:56:01
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31 Mar 15 10:55:21
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31 Mar 15 10:54:40
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31 Mar 15 10:54:32
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31 Mar 15 10:53:27
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31 Mar 15 10:53:21
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31 Mar 15 10:52:33
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31 Mar 15 10:52:31
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31 Mar 15 10:51:25
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31 Mar 15 10:51:24
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Market Int Center
31 Mar 15 10:22:03
iShares MSCI Emerging Markets Index $EEM Trading Near $40.54 Resistance Level ( http://t.co/QugupQ1qdv )
PolgarStocks
31 Mar 15 10:15:25
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31 Mar 15 09:24:29
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By  +Follow December 19, 2013 1:28PM
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