From The Economic Times · · 1m 10s
Foreign investors pull $26.3bn from emerging markets
Foreign investors withdrew $26.3 billion from emerging-market stocks and bonds in September as the Fed raised rates.
In brief
Foreign investors withdrew $26.3 billion from emerging-market stocks and bonds in September as the Fed raised rates. Foreign investors pulled $26.3 billion from emerging markets in September due to hawkish Fed policies pushing US Treasury yields higher. Originally reported by The Economic Times.
Foreign investors pull $26.3bn
Foreign investors withdrew $26.3 billion from emerging-market stocks and bonds in September, marking the first monthly outflow since June.
“Foreign investors withdrew $26.3 billion from emerging-market stocks and bonds in September, marking the first monthly outflow since June”
Hawkish Fed pushes US yields higher
The Federal Reserve raised interest rates for the first time since 2023, signaling inflation remained a concern and pushing US Treasury yields higher.
“The Federal Reserve raised interest rates for the first time since 2023, signaling inflation remained a concern and pushing US Treasury yields higher”
First net outflow since March
Non-resident investors pulled $7 billion from emerging-market fixed-income assets, resulting in the first net outflow since March.
“Non-resident investors pulled $7 billion from emerging-market fixed-income assets, resulting in the first net outflow since March”
Korean equities drive $19.2bn outflow
Heavy foreign selling in South Korea drove a $19.2 billion outflow from emerging-market equities in September.
“Heavy foreign selling in South Korea drove a $19.2 billion outflow from emerging-market equities in September”
AI tech rally cools
Investors locked in gains from richly valued semiconductor and technology stocks as the AI-driven tech rally cooled.
“Investors locked in gains from richly valued semiconductor and technology stocks as the AI-driven tech rally cooled”
Outflows exceed previous year
Emerging markets saw year-to-date equity outflows of $113.9 billion, compared with $27.3 billion in the same period last year.
“Emerging markets saw year-to-date equity outflows of $113.9 billion, compared with $27.3 billion in the same period last year”
What it means
Foreign investors pulled $26.3 billion from emerging markets in September due to hawkish Fed policies pushing US Treasury yields higher.
