Emerging Markets in Turmoil Amid Global Recession Fears

Emerging markets faced significant declines due to increased recession fears triggered by US trade policies. MSCI's index saw its biggest drop, as currencies in developing economies reacted to a weaker dollar. Key resources like oil and copper also declined, further straining these markets.

The stocks index for key emerging markets saw a marked decline on Friday, suggesting the largest weekly downturn in over a month. This movement comes as investors grapple with heightened recession worries, linked to President Trump's aggressive stance on free trade.

The MSCI index, tracking equities across developing nations, dropped by 0.6%, aiming for the sharpest weekly fall since late February. Notably, banking stocks experienced the most significant drops from Japan to Europe, with premarket declines also apparent on Wall Street. Market observers are closely monitoring a pivotal U.S. jobs report and statements from Federal Reserve Chairman Jerome Powell.

Currency markets experienced shifts as well, with a 0.2% rise in a currencies measure against a weaker dollar, marking the largest weekly gain since early March. The weaker U.S. dollar, resulting from trade tensions and currency adjustments, casts a complex impact, potentially easing debt servicing while heightening default risks for emerging economies.

(With inputs from agencies.)