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Market roundup | EM funds post biggest weekly outflow of 2017

LiveMint logoLiveMint 22-08-2017 Livemint

A standoff between the US and North Korea and racial violence in the US were enough to break a 21-week streak of flows into emerging-market (EM) funds.

Investors pulled $1.7 billion out of developing-nation equity and bond funds in the week ended 16 August, the most this year, according to data from EPFR Global. The geopolitical perils gave investors all the reason they needed to pare risk after lamenting for months that valuations are stretched. Bloomberg

Gold’s rally against oil is just beginning

Even as some analysts decry that gold is looking expensive, the rally may be just getting going. In the midst of a tumultuous month in US politics and global security, traders have pushed gold futures to near a nine-month high. But if the history of gold’s relationship with oil is any guide, that surge may last longer than the flare-up in geopolitical tension.

The precious metal has rallied 11% in 2017 so far to trade at $1,294.40 per ounce, compared to a 10% slump in crude oil. That divergence in price may still be going, meaning gold should continue to outperform oil before the 34-month cycle ends, according to a study of past trading patterns for the two assets. Bloomberg

India’s share in US textile exports rises in June

India’s market share in home textile exports (of all products) to the US rose by three percentage points to 34% in June from a year ago, JM Financial Institutional Securities Ltd said in a note. So far this calendar year, market share in dollar terms increased three percentage points in cotton sheets and two percentage points in terry towels, driven by volume growth.

The market share gains should provide reprieve to the textile exporters who are facing currency headwinds due to a strong rupee. “The recent sharp volume growth for both terry towels and bed linen, along with India’s rising market share in the global home textile space, is a welcome relief for the space given Indian rupee appreciation and regulatory uncertainty,” adds JM Financial.

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