Emerging market equities regained momentum as investor concerns about an immediate energy shock linked to Middle East tensions began to fade. After a sharp sell-off earlier in the week, markets stabilised and moved higher as traders reassessed the likelihood of prolonged disruption to global oil supplies.
The rebound was most pronounced in Asia, where South Korean equities led gains across emerging markets. The Kospi index recorded one of its strongest advances in decades, recovering part of the steep losses triggered by the initial surge in geopolitical risk.
Energy markets had been the central driver of volatility. Concerns that conflict involving Iran could disrupt flows through the Strait of Hormuz pushed crude prices higher and sparked fears of renewed inflationary pressure globally. For emerging markets, many of which rely heavily on imported energy, higher oil prices raise costs for industry and increase pressure on currencies and trade balances. The prospect of sustained energy disruption therefore prompted a rapid sell-off in risk assets across the region.
Bargain hunting emerged after several sessions of sharp declines, particularly in markets with strong export sectors. Technology stocks were a key driver of the rebound in South Korea, where major semiconductor companies helped lift the broader index and restore confidence among global investors.
Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.
