2011 has only just begun, yet there’s already a key trend investors need to be aware of.Some of the emerging markets most lauded for their gains in 2011 are now dipping, some even tanking, as a result of inflation and rate hike fears.
This isn’t exclusive to Asia either. The slowdown has hit Latin American and South American shares too.
Biggest companies: Pampa Holdings, Telecom Argentina, Molinos, Petrobras Participaciones and Tenaris.
Change year-to-date: -2.27%
Argentinian inflation is out of control, rising 25% year-over-year. There are lines outside of ATMs because banks are running out of currency. The government has thus far been unwilling to offer a note bigger than 100 pesos.
Down 2.58%: Indonesia's Jakarta Stock Exchange tanks as country's central bank prepares to raise rates.
Biggest companies: Telekom Indonesia, Bank Central Asia, Bank Negara Indonesia, Semen Gresik and Bank Raykat Indonesia
Change year-to-date: -2.58%
Stocks began to tumble in anticipation of a 1% benchmark interest rate hike by Indonesia's central bank according to Bloomberg. The goal of this rate increase is to stem the country's 6.96% year-on-year inflation rate.
Down 4.23%: India's BSE diving over concerns inflation is out of control and the central bank is going to raise rates way higher.
Biggest companies: Reliance Industries, ONGC, Tata Consultancy Services, Infosys Technologies and State Bank of India
Change year-to-date: -4.23%
India is experiencing extremely high inflation, with food prices rising 18.32%. The government is attempting to contain inflation ahead through increases in interest rates, and markets are selling off fearing lower returns.
Down 12.8%: Bangladesh's Dhaka Stock Exchange closed today after it crashed more than 9% in one hour.
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