China, India and South Korea see wealth erosion of $1.4 trillion in 2018

China, India and South Korea, which are the three biggest Asian markets, excluding Japan, have seen erosion in market capitalisation of $1.4 trillion this year, so far. On the other hand, developed markets such as the US, the UK and France have fared much better, signalling global funds could be shifting their preference away from riskier emerging markets. While the bulk of the erosion in the Asian markets is on account of China, India and South Korea too have lost significant ground, particularly in dollar terms. China has lost over a trillion dollars of its market value this year. India and South Korea have seen wealth erosion of $210 billion and $115 billion, respectively. Meanwhile, the US has added $1.2 trillion to its market cap this year.

Rising bond yields, improved economic outlook and strengthening currency have acted as a tailwind for the US equities. The same factors, however, are seen as a headwind for developing markets, which are witnessing a pullback from overseas investors. The global pecking order, in terms of market cap, has remained largely the same this year, except for a notable change. The Canadian market has once again overtaken India in terms of market value.