Emerging Markets Bounce

Sentiment about emerging markets is prone to big swings. From the late 1990s optimism, bordering on euphoria, was the order of the day. That bubble burst more than five years ago.  Since then, but with some conspicuous exceptions, sentiment about emerging markets has become increasingly negative.

China's long-term slowdown, widespread political turmoil, falling commodity prices, and the withdrawal of capital by foreign investors have all played a role. Emerging market equities have taken a hammering and growth has softened.

At the start of this year sentiment hit a new low. The risk of a hard landing for emerging economies, especially China, was widely seen as the biggest danger to the global economy.