Emerging Markets Decline Amid JD.com Tumble and Fed Caution

Emerging market stocks took a hit as Hong Kong shares, led by JD.com, fell significantly. Currencies remained stable amid anticipation of the Federal Reserve's policy meeting minutes. A stake sale by Walmart in JD.com impacted the Hang Seng Index, while regional currencies experienced minor fluctuations against the U.S. dollar.

Emerging market stocks experienced a decline on Wednesday, driven largely by a drop in Hong Kong shares following JD.com's tumble. This decline occurred while regional currencies remained relatively flat, reflecting caution ahead of the Federal Reserve's latest policy meeting minutes.

The most significant impact came from the Hang Seng Index, which fell as shares of JD.com tumbled after Walmart sold a stake in the e-commerce giant, aiming to raise up to $3.74 billion. According to a term sheet seen by Reuters, Morgan Stanley adjusted its targets, lowering the Hang Seng Index to 17,000 while increasing the blue-chip CSI300 to 3,500 amid ongoing deflationary pressures.

Meanwhile, the U.S. dollar hit its lowest level in 2024, and South Africa's rand stayed flat after July's inflation data. The Russian rouble weakened by 0.6%, and the Polish zloty fell 0.2% against the euro. Market participants are now looking ahead to the Jackson Hole conference for further economic guidance from Fed Chair Jerome Powell.

(With inputs from agencies.)