Rebound Hangs in Balance for Emerging Markets as Headwinds Grow
- ING says weak economic tone to be carried over to August
- Brazil forecast to cut rates; bets on India rates are split
Pedestrians wearing protective masks walk along 25 de Marco street in Sao Paulo, Brazil, on July 30.
Photographer: Jonne Roriz/BloombergEmerging-market stocks and currencies are within touching distance of erasing their pandemic-fueled losses of 2020. Too bad the virus is still running riot, economies are shrinking and central banks are getting low on firepower.
In fact, the backdrop is so grim that investors may soon start to take the view that prices are starting to defy gravity. After falling more than 30% by March, developing-nation stocks as measured by MSCI Inc.’s benchmark index are just about 3% below the level at which they started the year. A gauge of currencies is also 3% short of its 2020 starting point, while a Bloomberg-Barclays index of local bonds is already back in positive territory.