Emerging Markets stocks set for weekly losses on US-Iran tensions, tech weakness

Semiconductor stocks have been under pressure this week despite chipmaker TSMC's 2330.TW upbeat second-quarter earnings and chip-equipment manufacturer ASML's ASML.AS 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 .TWII tumbled 6.5% on Tuesday, the most since U.S. President Donald Trump's "Liberation Day" tariffs, while Chinese blue-chip stocks .CSI300 fell 3.6%. Futures tied to the U.S. Nasdaq dipped 2%. South Korean equities remained shielded as markets were closed for a holiday. 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 .MSCIEF lost 2.7% and was heading for its steepest weekly losses in nearly three weeks, while the currencies gauge .MIEM00000CUS dipped 0.2%, though looked set to log marginal weekly gains. The risk-off mood spilled into other EMs, as most emerging Europe stocks lost ground. Polish blue-chip stocks .WIG20 slipped 0.8% and Hungary's main index .BUX declined 0.5%, while the Romanian benchmark .BETI 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. O/R The dollar index =USD 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 ZAR= edged 0.5% lower, while its stocks .JTOPI slid 1%. Turkey's lira TRYTOM=D3 was muted while its stocks .XU100 were down 1.8%. Most emerging European currencies traded lower against the euro, with the Hungarian forint HUF= and Polish zloty PLN= 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.

Emerging Markets stocks set for weekly losses on US-Iran tensions, tech weakness

Chip weakness and Asia-led losses

EM stocks and currencies weaken on risk-off tone

Broader emerging-market pressure and energy fears

Currencies, country moves and upcoming ratings reviews

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