EM stocks, currencies extend gains as oil hits low for the day

Emerging-market stocks and currencies faced renewed pressure on March 10, 2026, as oil prices surged to $100 a barrel amid escalating Middle East tensions, exacerbating concerns over energy costs. The MSCI Emerging Market Index fell more than 10% from its late-February peak, with South Korea’s Kospi index declining over 18% as tech and automotive shares underperformed in a broad risk-off environment according to Bloomberg data. Emerging-market currencies also weakened, with the MSCI EM Currency Index dropping 0.8%, led by the South Korean won, Philippine peso, and Indonesian rupiah, which hit record lows against the U.S. dollar as reported.

The surge in oil prices, driven by disrupted shipping through the Strait of Hormuz, intensified pressure on net energy importers such as South Korea, India, and Japan, which face higher import bills and potential terms-of-trade shocks. Meanwhile, oil exporters like Saudi Arabia and Russia benefited from elevated prices, though Gulf states with dollar-pegged currencies remain vulnerable to spillover risks. Analysts noted that geopolitical uncertainties are overshadowing domestic fundamentals, with Bob Savage of BNY highlighting the outsized influence of energy markets on EM asset performance.

Monetary authorities in Turkey and the Philippines have intervened to stabilize local currencies, while central banks in oil-importing nations brace for inflationary pressures. The JPMorgan EM FX Volatility Index rose above levels seen in Group-of-Seven markets, reflecting heightened uncertainty. Investors remain cautious, with JPMorgan and Citigroup reducing exposure to EM bonds amid expectations of prolonged volatility. The interplay between oil prices, currency movements, and global risk appetite underscores the fragility of EM markets in times of geopolitical stress.