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EMERGING MARKETS-EM stocks set for weekly losses on US-Iran tensions, tech weakness
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EMERGING MARKETS-EM stocks set for weekly losses on US-Iran tensions, tech weakness
Jul 17, 2026 2:54 AM

* MSCI EM stocks down 2.7%, FX slips 0.2%

* Taiwanese stocks down the most since Trump tariffs

* IEA warns of global energy security risk over Mideast

tensions

By Utkarsh Hathi

July 17 (Reuters) - Most emerging-market stocks slipped on

Friday as intensifying U.S.-Iran hostilities and waning

enthusiasm for chip stocks globally weighed, while currencies

were flat to lower against a stable dollar.

MSCI's global EM stocks index lost 2.7% and was

heading for its steepest weekly losses in nearly three weeks,

while the currencies gauge dipped 0.2%, though

looked set to log marginal weekly gains.

Semiconductor stocks have been under pressure this week

despite chipmaker TSMC's upbeat second-quarter

earnings and chip-equipment manufacturer ASML's

forecast raise, as investors booked profits and remained

concerned about the sustainability of the AI-driven rally.

"The inability of such impressive results to trigger a

positive market reaction shows one thing: valuations across

chipmakers have run ahead of themselves," said Ipek

Ozkardeskaya, senior analyst at Swissquote Bank.

Ozkardeskaya said investors were growing uncomfortable with

enormous AI spending that could lead to rising leverage risks.

Taiwan's tech-heavy benchmark index tumbled 6.5% on

Tuesday, the most since U.S. President Donald Trump's

"Liberation Day" tariffs, while Chinese blue-chip stocks

fell 3.6%. Futures tied to the U.S. Nasdaq dipped 2%.

South Korean equities remained shielded as markets were

closed for a holiday.

The risk-off mood spilled into other EMs, as most emerging

Europe stocks lost ground. Polish blue-chip stocks

slipped 0.8% and Hungary's main index declined 0.5%,

while the Romanian benchmark was off 0.2%.

Meanwhile, intensifying tensions in the Gulf between the

U.S. and Iran increased fears of a prolonged energy supply

disruption and dampened prospects for the global economic

outlook, putting markets under further strain.

"Inflation has surprised to the downside in most EMs, in

part reflecting contained food price pressures," said analysts

at Barclays in a note.

"A hiking premium seems warranted despite softer inflation

prints, as the direction of travel is still higher for U.S.

rates, and energy prices remain volatile."

The International Energy Agency said that global energy

security is at risk if oil supplies through the Strait of Hormuz

do not increase soon. Oil prices were heading for their biggest

weekly gain in nearly three months.

The dollar index held steady, but was poised for

weekly declines as soft U.S. inflation reports this week dimmed

expectations for an imminent Federal Reserve rate hike in July.

South Africa's rand edged 0.5% lower, while its

stocks slid 1%.

Turkey's lira was muted while its stocks

were down 1.8%.

Most emerging European currencies traded lower against the

euro, with the Hungarian forint and Polish zloty

slipping 0.4% each. The latter was set for its seventh week of

declines - its longest since 2022.

Elsewhere, Ukraine's President Volodymyr Zelenskiy proposed

a top security official as its new defence minister. Zelenskiy's

dismissal of the former defence minister had led to protests in

the country.

Fitch is scheduled to review its ratings on Turkey and Kenya

later in the day.

HIGHLIGHTS:

** China set to leave benchmark lending rates unchanged for 14th

month in July

** How Korean stocks turned from trusty bellwether to AI frenzy

** Malaysia's economy grew 5.8% yr/yr in Q2, official estimate

shows

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see

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