The world is currently going through a tough economic situation. The crisis has been speculated to be worse than the Great Depression of the 1930’s. The mayhem that started in Europe has slowly spread across the globe and relatively new and emerging markets have started to feel the heat of the crisis. The situation in Europe is getting more and more volatile day by day and is fuelling the crisis all over the world. Virtually, no economy or country in the world is safe from the ongoing catastrophe and the emerging markets are particularly vulnerable to even more setbacks due to their precarious condition.
The Stocks in Emerging Markets
The Exchange Trading Fund or ETF that tracks the shares of developing nations and emerging markets has fallen to the lowest point in two weeks. iShares MSCI Emerging Market Index ETF staged a fall of 1.6 percent . The Brazilian oil giant OGX Petroleo e Gas Participacoes SA has slumped the most since 26th October as the price of crude oil has reached the lowest point this year. The mining company MMX Mineracao e Metalicos SA has fallen 5.1 percent staging the sharpest decline since 20th June. The Micex Index in Russia and Brazil’s Bovespa Index dropped 1.6 percent as stock prices of oil companies slumped down. Hungary’s BUX Index slid 1.6 percent and Mexico’s IPC Index staged the biggest decline of 1.7 percent since 1st June. The IGBC gauge in Colombia dropped 2.5 percent exhibiting a constant fall for seven days. However, South Korea’s Won gained 0.5 percent against dollar and reached its strongest level in fourteen months. But, the Czech Koruna lost 0.9 percent per dollar.
What Traders Think
This is a very tricky situation for traders who rely a lot on emerging markets. Some are saying that with the US elections over days are going to get tougher if US decides to join the uncertainty that surrounds Greece and the rest of Europe. Yet some are saying that the decisive result of the US elections will have a positive effect on the world economy to some extent as there is little chance of terming China as a currency manipulator that would have made Yuan a major trade iussue.
It is difficult for binary traders to plan their future moves under current economic turmoil as each and every day is coming with a new challenge and a new probability. However, though it is not possible to arrive at any rigid conclusion regarding the fall of the stocks in the emerging economies one thing is sure that binary traders are not going to get a sense of relief in near future as the economic crisis is likely to continue for a considerable period of time.