Fear is what has been driving stock markets to recently crash. Why? Because of plunging oil prices and China’s falling economy. Saudi Arabia is determined to control the world’s oil prices so refuses to reduce its pumping in the hope of putting other types of energy companies out of business.
Oil prices have plunged from US$110 per barrel to a low of US$26.19 a barrel. This is destabilising for the world economy. It has caused stress in the credit market as oil is tied to many products.
Recently stock markets around the world took a tumble after investors dumped emerging market stocks. In this lesson we will look at what happened in the last week of January when investors yanked some US$3.3 billion; causing the largest outflow on record in dollar terms.
Emerging markets have been hit this year because of a slowdown in China, rising interest rates in the US, political turmoil in several countries around the world and overall concerns that emerging markets haven’t reformed fast enough to make growth substantial.
Category: Business / Emerging Markets / Funds