Something akin to a Jenga game nearing its end, with players wondering which move will be the one to bring everything crashing down.

EM valuations appear close to a historical pivoting point, given the MSCI gauge is more than 13 times forward earnings on a 12- month blended basis. The index corrected on four occasions over the past five years when valuations approached or breached that level.

Lofty S&P 500 valuations offer little reassurance for EM stocks, meantime. The outperformance in U.S. equities has been supported by unprecedented intervention from the Federal Reserve, especially via corporate bond buying. With the exception of rich emerging-nations such as South Korea, most developing-nation central banks have been less ambitious with stimulus, perhaps constrained by concerns for their currencies and perceptions of debt-monetization.

Investors continue to pull out from EM ETFs for a record 13th consecutive week, and the bulk of the cumulative $21.9 billion in outflows hit equity funds.