Business Standard

Risk aversion halts surge in emerging markets

The pullout by foreign funds comes in wake of escalating geopolitical tensions

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Pavan Burugula Mumbai
 
Risk aversion among global fund managers due to geopolitical tensions has applied brakes on the stellar run seen in the emerging markets (EMs) this year. Foreign funds pulled out over $4 billion from EMs, weighing on the performance of key markets such as India and South Korea. Both the markets shed over two per cent in dollar terms during the month.

Other EMs such as Indonesia and Mexico ended the month little changed. The MSCI EM Index saw a slight uptick because of gains in the China market, an index heavyweight which largely depends on local flows.

The risk-off

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