* 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
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
(Reporting by Utkarsh Hathi and Purvi Agarwal; Additional
reporting by Shashwat Chauhan in Bengaluru; Editing by Jan
Harvey)
ASML Holding