BENGALURU: Stocks in South Korea, Singapore and Taiwan led declines on Monday, while emerging Asian currencies stayed under pressure as Middle East tensions and fears of a prolonged war kept oil prices high and dented investor confidence.
MSCI’s EM Asia index fell to its lowest since January 2 and has lost more than 11 percent in March, on track for its worst month since September 2022. A gauge of global EM currencies hit a more than three-month low.
Risk assets across emerging Asia have come under pressure since the war began in late February, as net energy importers face supply disruptions and imported inflation.
DBS analysts said the conflict has spread beyond energy into fertilisers, disrupting supply and raising food inflation risks across Southeast Asia.
Oil held above last week’s USD110-a-barrel level as investors weighed US and Iranian threats to energy facilities against the release of millions of barrels of Iranian oil into global markets after Washington temporarily lifted sanctions. In East Asia, South Korea’s benchmark KOSPI index closed down 6.5 percent. The index is still the best performer year-to-date in the region with gains of 28.3 percent.
Meanwhile, exchange data showed retail investors bought a record 7 trillion won (USD4.62 billion) worth of shares in the benchmark KOSPI index in a single day, while foreign investors were net sellers, offloading 3.67 trillion won worth of stocks.
The won weakened to 1,518.40 a dollar, its weakest since March 2009.
Equities in Taipei pared some losses to close down 2.5 percent. The Taiwan dollar slipped to 32.196 a dollar, its weakest since late April 2025.
Shares in Singapore and the Philippines also lost between 2 percent and 2.5 percent in the afternoon.
“We have seen foreign investors systematically book profits in South Korea and Taiwan before the start of the conflicts,” said Jason Lui, head of APAC and derivative strategy at BNP Paribas.
“It is possible that they may continue to unwind their positions if there could be further escalation in the Middle East conflicts.”