Emerging Markets stocks fall as markets brace for fresh US sanctions on Iran

The Chinese yuan slipped slightly from a 3-1/2-year high after the central bank guided the currency lower, following eight straight weeks of gains. South Korea's won KRW=KFTC briefly rose to its strongest level since September 2025. The Shanghai Composite .SSEC lost 0.6%, while the blue-chip CSI 300 .CSI300 dropped 1.2%, after a surprise share placement at a sharp discount by Alibaba 9988.HK rekindled worries about heavy spending on AI. Shares in the company sank 10.5%. Samsung shares 005930.KS fell over 8% after its record $79 billion shareholder-return plan disappointed investors, pulling the KOSPI .KS11 down 3.1%. Taiwan's benchmark .TWII shed 1%. Attention now turns to Nvidia's NVDA.O earnings on Wednesday, which could offer a key test of the AI trade that has recently fueled volatility in global markets. In emerging Europe, the Polish zloty PLNEUR=R gained 0.1% against the euro, while Warsaw's WIG .WIG was flat. Fitch affirmed Poland's "A-" sovereign rating on Friday, citing a resilient economy and strong external finances, though it kept the outlook at negative due to weak fiscal consolidation. Polish retail sales rose 3.9% year-on-year in July, missing expectations for a 4.5% increase. Elsewhere, South Africa's rand ZAR=D3 firmed near its strongest level since the start of the Iran conflict, supported by rising gold prices — a key source of export revenue for the country. In Kazakhstan, a newly formed pro-government party won a large majority in Sunday's snap parliamentary election, according to three exit polls, a result expected to further cement President Kassym-Jomart Tokayev's grip on power in the energy- and minerals-rich nation. S&P upgraded Kazakhstan to "BBB/A-2" with a stable outlook, citing resilient economic growth and fiscal efforts. Fitch, meanwhile, revised Tanzania's outlook to positive from stable while affirming its "B+" rating. Emerging-market stocks dropped on Monday, while currencies were steady as investors braced for fresh U.S. sanctions on Iran and weighed the potential impact on oil supplies, inflation and growth across developing economies. U.S. Treasury Secretary Scott Bessent is set to hold a press conference at 1 p.m. EDT (1700 GMT), having promised more severe measures against Iran. Tehran responded by threatening to shut all Gulf oil exports if what it called the "economic war" continues. While the two sides have not exchanged military strikes for weeks, meaningful talks to end the six-month conflict have yet to materialize. MSCI's emerging-markets stock index .MSCIEF fell 1.6%, even as oil prices declined 1.8% to $92.69 a barrel. Falling crude prices normally support oil-importing emerging economies, but the prospect of sanctions targeting Iran's trading partners, and Tehran's threat to disrupt Gulf supplies, revived concerns over energy prices and global growth. The emerging-markets currency index .MIEM00000CUS was little changed after touching a record high earlier in the session. It has repeatedly set fresh peaks this month, supported by broad dollar weakness and demand for risk-sensitive assets. The greenback edged higher against a basket of currencies on Monday after hovering near multi-month lows; however, investors still remained uneasy over the U.S. Treasury's pledge last week to buy back more long-dated bonds. Chris Turner, global head of markets at ING said, "given the febrile mood in the market and positioning, a big re-escalation in the tariff war is probably a dollar-negative."

Emerging Markets stocks fall as markets brace for fresh US sanctions on Iran

Asian equities come under pressure

Mixed moves in Europe, Africa and sovereign ratings

Emerging markets weaken as investors weigh Iran sanctions risk

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