Emerging markets week in review: 5/27/11


Emerging market funds kept shedding money this week, but a revival in commodity prices gave some regions a bit of welcome upside. In all, mutual funds and ETFs that focus on emerging markets equities lost a net $1.1 billion last week -- an improvement over the previous week's loss of $1.6 billion but still a disappointment for those looking for flows to turn positive again. The flight of capital was especially severe for funds that specialize in Eastern Europe, the Middle East and Africa -- the so-called "EMEA" group. These funds shed investor dollars at their highest rate in nearly three years, which indicates that out flows here are at their worst since the credit crisis of 2008. Funds focused on Taiwan -- like EWT ( quote ) -- and Korea -- like ( EWY ( quote ) -- actually gained ground as investors shifted their allocations out of China into other Asian markets. In the commodity markets, Chinese demand for copper and iron ore seemed to be reviving, although the threat of power shortages ahead for steel mills kept the iron outlook on the neutral side. Brazilian stocks surged 2.7% as traders came around to the bargains in the heavily beaten-down local market. Both of the country's resource-driven heavyweight stocks, Petrobras ( PBR , quote ) and Vale ( VALE , quote ) rebounded on news and a stronger governance outlook . Stocks in Russia slid another 0.7%. At this point, Moscow seems oversold and despite some high-profile downgrades for heavyweights like Gazprom ( OGZPY , quote ) the higher-profile IPO of Yandex ( YNDX , quote ) cut through most of the gloom. In India , stocks edged down another 0.3%, caught between the prospect of pernicious food inflation and a supportive technical situation . Chinese stocks ended the week down 5.2%. The selling was due in large part to a disappointing private manufacturing data release that fueled trader fears of slowing growth ahead.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , International , Stocks

Referenced Stocks: EWT , EWY , OGZPY , YNDX

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