Time to Buy Stocks in Emerging Asia?
At the end of the summer, markets saw a marked pick up in price volatility. There is a wide variety of reasons for why this occurred. But the main question that investors are currently asking themselves is whether or not these latest moves were simply corrective pullbacks, or indicators of a much larger trend. These questions are being asked with even more direction when we look at the emerging markets space and further research in this area has been conducted in economic reports by FiboGroup. Here, we will look at some of the reasons why this might be the case.
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Big Trouble in Big China
One of the main catalysts for the recent weakness in stock markets has involved weakening economic data in China, the world’s second largest economy. This has made investors skittish, and much more likely to avoid the emerging Asia space when looking to establish long-term market investments. Not only that, these factors injected a fresh round of uncertainty back into the market and this brought down short-term valuations in the developed market space, as well.
So the real question here is whether or not China will be able to support growth on the Asian continent. It is starting to look as though precious growth and export numbers were likely inflated and manipulated. This would mean that the underlying fundamental strengthen in the region is not nearly as stable as previously thought and this can make it much more difficult for peripheral economies to gain traction in the weeks and months ahead.
In any case, investors will need to remain aware of the fact that weakness around the globe can still have a drastic impact on domestic stock valuations. We might see cases where corporate earnings surpass the initial market expectations but any later rallies are diminished by the fact that global demand is probably going to remain depressed. These are all factors that will need to be considered when you are looking to update your portfolio additions into next year. Some sectors are much more likely to benefit than others, so you will need to first assess these areas and then establish your positions accordingly.