LONDON, March 9 (Reuters) - Emerging-market stocks were on the edge of correction territory on Tuesday, as the recent rise in global bond market borrowing costs and the dollar tempered appetite for risk.
MSCI's 27-country EM index, which contains nearly 1,400 companies, had rallied more than 90% from last year's COVID-crisis lows, but it has been sliding since mid February as global equity markets have turned.
A 2.2% fall in one of China's main markets briefly pushed the EM index beyond the 10% peak-to-trough threshold that analysts define as a market correction. But a 2.3% rally in Russian stocks and 1.2% rebounds in Poland and Turkey lifted it just enough to provide a reprieve.
Many of the world's big investment banks and funds were backing emerging-market assets to have a strong year this year as economies bounce back from COVID, but it has been a difficult start so far.
The drop in stocks is more than double that of MSCI's main global index. JPMorgan's local currency debt index has returned -5.4% since the start of the year, while the equivalent hard-currency debt benchmark is down 4.6%, its worst start to a year in quarter of a century.
MSCI's index of emerging-market currencies also saw its sharpest fall on Monday since the pandemic-driven drops a year ago.
(Reporting by Marc Jones, editing by Larry King)
