(Bloomberg) -- Stocks in emerging markets have historically been more volatile than their U.S. peers. Not anymore.
After a 29 percent gain in the first week of December and a 20 percent advance last week, the VIX Index reached 28.12 on Thursday. That's 2.4 points higher than the volatility gauge in emerging equities.
It doesn't happen often that the volatility in the largest stocks in the U.S. exceeds that in emerging-market stocks -- in fact, Thursday's trading pattern is happening for the fourth time ever, with three previous occurrences happening during a volatility blowup in February.
Developing stocks' price swings, measured through the Cboe Emerging Markets ETF Volatility Index, have averaged 23.3 since 2011, compared with 16.2 for the VIX Index over the same time. As uncertainty mounted over the pace of economic expansion and interest rate hikes in the U.S., selling pressure in developing markets has eased amid bets the asset class has fallen too far.
Concerns from a rising dollar to geopolitical uncertainty to meager growth have pushed emerging equities down 17 percent this year, compared with a 7.5 percent loss in the S&P 500. Still, since U.S. stocks peaked in late September, the MSCI Emerging Markets Index has dropped 7.4 percent, compared with a 16 percent loss in the S&P 500. Stocks in the EM gauge have outperformed the S&P 500 for three consecutive weeks, the most since late January.
To contact the reporter on this story: Elena Popina in New York at epopina@bloomberg.net
To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Jeremy R. Cooke
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