What's going on?

The recent market selloff hit assets ranging from stocks to oil to currencies like the dollar. But there has been a group of winners: emerging markets.

What does this mean?

Not so long ago emerging markets like Turkey and Argentina were in a bit of a pickle, as inflation spiraled and their currencies collapsed � but things are now looking up. Turkish house sales have started to bounce, boosted by government regulation, and consumer confidence is also on the rise.


A falling oil price � which some argue has been helped by the limited impact of US sanctions on Iranian oil production in the short term � is a big boon to countries which rely heavily on overseas supplies to meet their energy needs. Emerging markets from India to Indonesia now enjoy lower shopping bills for fuel � meaning there�s more money for consumers to spend on goods and services, and for businesses to invest in growth.

Why should I care?

For markets: Emerging markets are re-emerging.

While stock markets in more developed areas have been selling off throughout November, emerging market currencies � particularly those of big energy-buying countries � have strengthened 2.6% on average, relative to the dollar (tweet this). That makes buying things from overseas cheaper � and allows these countries� extra pennies to drive stronger economic growth. Not a bad state of affairs for them � assuming things stay like this.

The bigger picture: Emerging markets can also drive developed markets.

Emerging markets are closely connected to the world�s more established economies. Some emerging markets are mainly producers of goods, while others are predominantly consumers (China makes up about 18% of the world economy). Either way, they�re important for global economic growth � especially while many developed economies, like Europe, are struggling. If emerging markets are doing better, they�re more likely to buy up goods from abroad (including luxury items), helping markets like Europe and the US. It may be time to reconsider those gloomy growth forecasts…