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Prospect of War in Syria Rattles Emerging Markets

With Wall Street on edge over the looming military strike against Syria, investors in emerging markets like Turkey and India are rushing for gold and U.S. currencies. By Matt Phillips

Who’s scaring the markets more: Ben or Bashar?

The prospect of coordinated military strikes against Syria by the US, UK and France—after Syria’s apparent use of chemical weapons against its own citizens—is adding momentum to the rush out of emerging-market nations, as investors scramble to the traditional safe-haven assets: gold, US Treasurys and the US dollar. Aside from general skittishness, the added concern is partially related to the prospect of a Syria-related spike in oil prices, which raises risks of inflation in emerging markets.

Officials in fast-growing emerging markets have blamed Ben Bernanke’s Federal Reserve and hints of a taper in monetary easing for the recent sharp selloff in their markets. In India, the key Sensex stock index is down 11% over the last three months and the rupee is tumbling to record lows against the US dollar almost every day. Stock markets in Thailand, Philippines and Indonesia are all down about 20% over the last three months.

Read more at Quartz.

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