Global Markets

Emerging-market assets declined in early trading Monday due to growing concerns over disruptions to Middle East energy supplies. The MSCI Emerging Markets Index fell 2.5% as a selloff in South Korean chipmakers weighed on the market.

Risk assets remain under pressure as the Iran war enters its fourth week with little sign of easing. President Donald Trump's ultimatum to Iran raised the risk of further disruptions to Middle East energy supplies, with the Strait of Hormuz at the center of the tensions.

Oil prices have risen to around $112 a barrel, stoking worries that high energy prices and strained supply lines will hurt global growth. The MSCI EM stocks index is on track for a more than 11% drop this month, its worst since September 2022.

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Regional Markets

• South Korean stocks led declines in Asia, with the benchmark Kospi tumbling as much as 6.4%. Samsung Electronics Co. and SK Hynix Inc. were among the hardest hit as AI optimism faded amid concerns about higher interest rates.
• The Korean won slid to its weakest level against the dollar since 2009 despite the nomination of Shin Hyun Song as the next central bank governor.
• The Chinese yuan dipped after the central bank weakened its fixing by the most since November 2024.
• The Philippine peso traded below 60 per dollar, adding pressure on authorities to stem losses.

Market Outlook

• Extreme market volatility and geopolitical uncertainty remain the primary drivers of Asia-Pacific risk, according to BNY.
• Central banks and governments are expected to shift further into defensive mode, intensifying FX intervention to smooth volatility and deploying macroprudential measures to cushion living costs.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline