Emerging Market Currencies, Stocks Fall on Iran Conflict Worries

2698j(iq)a3tl3o0oi9c4j2s_media_dl_1.png BloombergArticle content(Bloomberg) — Emerging-market currencies and stocks slumped in Asia trading on Monday as worries over Iran conflict and surging oil prices weigh on sentiment for risky assets.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentA gauge of developing nations’ currencies dropped 0.5%, declining for a second session in a row as the dollar strengthened. The Philippine peso and Taiwan’s dollar fell the most among peers. South Korean markets were closed for a holiday. EM equities, meanwhile, dropped as much as 1%, the most in more than two weeks.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentThe escalating tensions in Iran, which have spread to the broader region, have disrupted various sectors from oil and shipping to air travel. Benchmark Brent crude oil surged to its highest level in more than a year before paring while the greenback and gold jumped as investors piled into safe haven assets, further hurting emerging-market currencies and fueling inflation concerns.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“This is a shock that pushes EM weaker,” said Brendan McKenna, an emerging market strategist at Wells Fargo in New York, adding that the Iran response has been more hostile than before with the Strait of Hormuz effectively closed and more aggressive US-Israel cooperation. Article content“That shock, combined with the theme that EM is overvalued and overowned at current levels, should drive a selloff in the early days of the conflict,” he said. Article contentSome countries with high dependence on oil imports, like South Korea, Taiwan, India, the Philippines and Thailand, might see their currency underperform more, according to Sim Moh Siong and Christopher Wong, strategists at Oversea-Chinese Banking Corp. Article contentArticle contentThe escalation of the conflict also lifted energy, shipping, defense and gold shares in Asia while pushing down airlines, travel and growth stocks. Taiwan’s shipping companies Wan Hai Lines and Evergreen Marine rose while Singapore Airlines, Japan Airlines and Eva Airways slumped.Article contentBloomberg Economics said the conflict could lead to a significant increase in oil prices to as high as $108 per barrel if the Strait of Hormuz is closed.Article content“The scope of the conflict appears vast and the stakes high — with Iran confirming the supreme leader was killed,” analysts led by Dina Esfandiary wrote. “This confrontation could prove longer and more intense than the 12-‎day war in June.”Article contentTrending What's at stake for oil markets as Trump strikes Iran Oil & Gas The (high) opportunity cost of paying off your mortgage early Mortgages Trump Seeks Iran Leadership Transition as Report Points to Talks PMN Business Stocks Decline, Oil Rises as Iran Crisis Unfolds: Markets Wrap PMN Business Feds to invest millions in startup accelerator to boost Canadian defence and dual-use companies Innovation Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. What's at stake for oil markets as Trump strikes Iran Oil & Gas The (high) opportunity cost of paying off your mortgage early Mortgages Trump Seeks Iran Leadership Transition as Report Points to Talks PMN Business Stocks Decline, Oil Rises as Iran Crisis Unfolds: Markets Wrap PMN Business Feds to invest millions in startup accelerator to boost Canadian defence and dual-use companies Innovation