Driven by surging oil prices, emerging market stocks experience their largest drop in over a month

Glonghui, May 15｜Due to rising oil prices and investors’ caution ahead of the weekend, emerging market stocks and currencies fell back after two consecutive days of gains. The MSCI Emerging Markets Index dropped 2.2%, marking the largest decline in over six weeks, as the artificial intelligence sector cooled and South Korea’s major stock index plunged amid increased sell-offs by overseas investors. With Brent crude oil prices rising more than 1%, the critical Strait of Hormuz effectively still closed, and little progress made in ending the Middle East conflict, market concerns about rising inflation have weakened investors’ risk appetite. Malayan Banking Bhd foreign exchange strategist Shaun Lim said, “Risk assets may continue to fluctuate within a polarized range for now, but pessimism is at least not strong.” He also noted that the key issue of the Strait of Hormuz remains unresolved.