08.08.201410:53:37UTC+00Emerging stock poised for 2nd week loss on Iraq tension

Emerging stocks approached a second week loss as the crisis in Iraq puts fear of stalling on the global economic recovery with the situation escalating with announcement by US President Obama to authorize an airstrike on the country.

The MSCI Emerging Markets Index shed 0.4% to 1,047.21, 1:35 pm, London time. The decline is now at 1.2% for the total in the week. US President Barack Obama has given the go signal for a US airstrike on Iraq with the purpose of avoiding genocide while no ground troops will be sent in. The announcement has definitely escalated tensions further with Russia as it retaliated versus the US and European sanctions with the ban on import foods from the western countries. Russian President Vladimir Putin is in the position to raise the turmoil right now if Russia decides to invade Ukraine.

South Korea’s Samsung Electronics Co. lost in the trade to reach a four month low. Polish and Indian equities shed a minimum of 0.5% as Russian equities recovered along with rubble following a report from RIA Novosti that Russia is ready for negotiation in Ukraine.

Chief emerging-markets economist at Capital Economics, Neil Shearing, commented to Bloomberg that the geopolitics is pressuring the market that renders investors more cautious.

The developing stocks index added 4.4% for the year already while the MSCI World Index advanced by 1.1% in the period.