Emerging Market Stocks Plummet Amid Hawkish Fed Remarks

The global selloff in emerging market stocks, spurred by hawkish remarks from the Federal Reserve, has reduced the potential for a U.S. rate cut. This market dip has erased earlier gains, impacting various global financial indices and currencies, particularly in Central-Eastern Europe and emerging Asian markets.

Emerging market stocks joined a worldwide selloff on Friday following assertive Federal Reserve comments dampening prospects for a U.S. rate cut next month. This sparked risk aversion, reversing gains made earlier in the week.

MSCI's emerging market stock index plunged 1.7%, marking its worst single-day drop since April, as investor sentiment soured over fears of continued economic turbulence. These movements shrank equity gains for the week to just 0.3%.

Central-Eastern European markets, including Poland, Hungary, and Romania, faced downturns, with major stocks and currencies experiencing varied impacts. Meanwhile, Senegal's bonds hit distress levels amid stalled negotiations with the IMF, and South Korea's won stabilized after suspected government intervention.

(With inputs from agencies.)