A grizzly mix of U.S.-China trade tensions, central banks turning off the money taps and cooling growth in hotspots including Europe has wiped a trillion dollars off MSCI’s 47-country world index.
A rising dollar and 16 percent increase in oil prices have given emerging markets a particularly rough time as well, Reuters said.
Argentina's peso ARS= and Turkey's lira TRY= have been shredded 30 and 17 percent, respectively, Chinese stocks have entered bear market territory and EM equities .MSCIEF have slumped 10 percent, or 17 percent excluding a brief January surge.
“People just woke up to the fact that something has changed,” said London & Capital’s Chief Investment Officer Pau Morilla-Giner.
As well as the escalation in global trade tensions “there has been a realization that the big central banks aren’t thinking about stimulating the economy anymore, they are trying to build up capacity in case of recession.”