Local sentiment and impact on EMs: Striking inferences
Synopsis: Since January, as the US markets started showing cracks because of rate hike expectations from the Fed and many tech stocks faced a reality check, the emerging markets started getting more traction. But then came the Russia-Ukraine war and as oil prices soared and global recession fears started looming on the horizon, did the investor sentiment change? We looked at an eclectic mix of some major EMs including China, India, South Korea, Taiwan, Brazil, Indonesia, and Poland. The recent local market sentiment and performance of major stock market indices for these EMs appear to be closely related. If we were to dig further, China, India, Taiwan, and Brazil are especially exciting with an almost perfect reflection of local sentiment in the market performance of these countries.