A global flight from emerging market assets gathered pace on Friday, sending the Turkish lira to a record low and setting global shares on course for their worst week this year.
European shares fell, especially in firms exposed to emerging markets, and a sell-off on Wall Street was poised to extend into a second day as investors worried about the impact of slower growth in China, U.S. monetary policy and political problems in Turkey, Argentina and Ukraine.
The sell-off raised the prospect of a repeat of moves last June when developing country stocks fell almost 18 percent and hit global shares. This came after the U.S. Federal Reserve signaled its intention to scale back the bond-buying stimulus that had led investors to chase higher returns in emerging market assets.
“We expect the emerging market sell-off to get worse before it starts getting better,” said Lorne Baring, managing director of B Capital Wealth Management in Geneva.
