Asian and emerging markets entering the late stages of a bear market
Published On: Thursday, May 12, 2022 | By: Team KnowMyStock
Asian and emerging markets are entering the late stages of a bear market, said some analysts in their outlook note yesterday(12 May 2022). The near-term risks, the note said, are known, but potent. Typically, a market is said to be in a bear phase when the frontline stock indices drop 20 percent or more from their recent high.
Asia and EM equities are entering the late stages of a bear market that has traversed valuation, regulation, geopolitics and supply chain pressures. Near-term risks are known but still potent. Regionally, we see ASEAN and the Middle East as beneficiaries of the higher inflation and resource-constrained global picture, with favourable macro-stability positions and growth supported by reopening. North Asia is more challenged by a weaker export outlook and semi downcycle,” wrote the analysts.
Some strategist are cautious on EM equities in global context than other parts of global economy. Within EMs, India is among the least favoured markets in Asia. The bigger risk is for Nifty to be below consensus is valuations, rather than earnings. With rates rising across the world (including in India), we see the rub-off on valuations going forward.
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