The emerging markets stock index entered correction territory.

The closely-watched market equity gauge has moved into correction territory, a conclusion of uncertainty over US trade policies and concerns about China’s economic growth.

The MSCI EM index closed 0.4 percent lower on Thursday at a four-month low of 1,066.47. That took the gauge’s drop from October’s near 20-month high of more than 10 percent.

Emerging market stocks have come under pressure in the final quarter of 2024 as Donald Trump wins the US presidential election and traders’ proposed tariffs and other policies could have a negative impact on the country’s trading partners.

Chinese stocks have been sold off in recent months not only by the potential impact of US tariffs, but also by Beijing’s economic stimulus package falling short of investor expectations. At more than 27 percent, Chinese stocks represent the largest single country weighting in the MSCI EM index.