Are Emerging Markets Cracking or Crashing on Greece Woes?
Investors Sound the Alarm as Greece's Drama Unfolds
Emerging market ETFs plunged
Emerging market equities are comparatively less exposed to the Greece crisis, however, they too were affected by the negative sentiment prevailing on Monday, June 29.
The iShares MSCI Emerging Markets Index ETF (EEM) fell by 2.23% on Monday, while the Vanguard Emerging Markets Stock Index ETF (VWO) plunged 2.21% on Monday as Greece imposed capital controls on banks.
Chinese stocks heavily affected
Chinese shares contributed significantly to the downfall of emerging market funds, as the iShares MSCI China Index ETF (MCHI) sank 2.84% on Monday. Stocks leading this decline included Tencent Holdings (TCEHY), China Mobile (CHL), and HSBC—they were down by 4.5%, 0.75%, and 2.88%, respectively.
The Global X China Financials ETF (CHIX), which tracks the financial sector in China, plunged 2.85% by the close of trading on Monday.
The iShares China Large-Cap ETF (FXI) was down by 4.2% and is down 7.2% in the last month alone. Year-to-date, however, FXI is up by 8.7%. The iShares China Large-Cap ETF tracks the investment results of an index composed of large-capitalization Chinese equities that trade on the Hong Kong Stock Exchange.
Indian stock markets were also affected by global woes. The iShares S&P India Nifty 50 Index Fund (INDY), which tracks the 50-share Nifty Index, shed 2.31%. Bank Nifty led this correction, which fell 550 points on bearish sentiment in global markets on concerns of a Grexit. The iShare MSCI India ETF (INDA), which tracks a market-cap-weighted index of the top 85% firms in the Indian securities market, tumbled 2.2%.
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