According to analysts, stocks of emerging markets have risen by more than 20% since the October low. The growth factor is the weakening of global inflation, as well as hopes that the US Federal Reserve System will slow down the pace of interest rate hikes in the near future. Experts note that expectations of a slower rate hike are causing growing enthusiasm for emerging markets stocks. The MSCI Emerging Markets index rose by more than 21% compared to the intraday low recorded on October 25. As a rule, a 20% increase is considered a transition to a bull market. In general, in the period from February 2021 to October 2022, the indicator fell by more than 40%. The fact is that the strengthening of the US dollar caused an outflow of money from risky assets, including emerging markets shares and bonds denominated in local currency. Analysts note that investment funds that buy such assets experienced the largest loss of funds in the entire history of observations in 2022. Optimism about the Chinese economy also contributes to the current growth of the market of developing countries: investors expect that after the easing of anti-bullying restrictions, a recovery in business activity in China will follow at the end of this year. As a rule, the growth of production in China often benefits other countries with developing economies that supply goods and resources to this country.
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