“The fact is that EM equities was a consensus asset allocation play this year and headed into the conflict in a very overheld position,” Geoffrey Yu, a senior market strategist at BNY, said in an interview. “The market is moving toward liquidity preservation, which means high-performing positions are most at risk, and emerging-market equities and also fixed income unfortunately are in this bucket.”
(March 23): Emerging-market stocks ceded earlier losses on Monday as traders waited to see if positive comments from US President Donald Trump over ending the Iran war would translate into concrete action.
MSCI’s Emerging Markets Index fell as much as 3.5% before paring declines to trade 2.7% lower after Trump’s comments. A gauge tracking emerging currencies also trimmed losses to stand about 0.2% lower, as Trump’s comments hit the dollar and pushed oil 7% lower. While risk assets in general have been under stiff pressure, some emerging markets that entered 2026 as a favoured trade are seen bearing the brunt of the sell-off.
