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What the EM sell-off means for European stocks

As pressure remains on emerging markets, Goldman Sachs has warned over European equities' sensitivity to the region, with some indexes particularly exposed.

European stocks are more sensitive to emerging markets than their U.S. counterparts, Goldman said in note on Friday, and were generally highly exposed to the region's end markets in sales terms.

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"The prospects for EM (emerging market) economies and the timing of any recovery in their markets is an important consideration for investors in European equities," analysts led by Caesar Maasry wrote.

Emerging markets have taken a battering over the past week, amid growing worries about some countries' fundamentals, and the winding down of monetary stimulus in the U.S. On Wednesday, the Federal Reserve confirmed that it would scale back its monthly bond-buying program — which has boosted risk sentiment and emerging markets as a result — by another $10 billion.

(Read more: Emerging market rout 'a long time coming': Rhodes)

The sell-off steadied on Friday, but concerns about the region continue, leading investors to look to developed markets like Europe as an alternative.


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