Emerging market stocks declined the most in two weeks as the US Presidential race tightened close to Election Day.
Investors are concerned that a Trump presidency, the Republican candidate for President, would work to eliminate trade deals and fine US companies for manufacturing products overseas.
In addition to stocks, Mexico's currency, as well as Poland and South Korea's equities dropped sharply as the premium for emerging market debt over Treasuries increased.
“Everyone is focusing on the U.S. election because of yesterday’s poll. Investors are getting more risk-off after the outperformance of emerging markets earlier this year. Trump would be more detrimental for emerging markets because of all of his talk of protectionism” said Patrick Mange, an emerging-market strategist at BNP Paribas Asset Management.
The MSCI Emerging Markets Index declined 0.9 per cent to 894.53, its lowest since 17 October, amounting to a 3.5 per cent drop since the 2016 high in September.
Read more at Bloomberg.