e07cs3jprnl4pd4o31cq{b42_media_dl_1.png Bloomberg, MSCI

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(Bloomberg) — Emerging-market assets extended losses as the war in Iran continued to impede key global energy shipments, lift the dollar and force investors to adjust to the risks of higher inflation across the world.

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MSCI Inc.’s benchmark for developing-nation equities fell more than 3% by 8:40 a.m. in London, the most since US President Donald Trump’s global tariffs announcement convulsed markets last April. The equivalent gauge for currencies was down 0.8% on the day and 1.5% since Friday’s open.

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Emerging-market investors remained in the dark about how long the war in Iran will last amid conflicting messages from the US and continued airstrikes, which are destabilizing the entire region. Oil and natural gas prices jumped further, stoking concerns over a flare-up in inflation that will limit the scope for global interest-rate cuts.

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“For FX markets, this continues to look like a tale of the haves and the have-nots when it comes to energy independence,” ING Bank strategist Chris Turner wrote in a note. “The dollar looks the best currency to take advantage of this energy shock.”

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South Korean stocks, returning from a long weekend, joined the selloff, taking the benchmark Kospi index 7% lower, the most since August 2024. The won also slumped, though the Chinese onshore yuan climbed.

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In Europe, the forint remained the worst performer due to Hungary’s sensitivity to costly energy imports, followed by the Polish zloty. Local-currency bond yields also spiked further across eastern Europe amid rising inflation concerns.

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European natural gas prices surged as much as 34% amid uncertainty over how long exports will be halted from the world’s largest LNG export plant in Qatar, casting a shadow over the assets of energy-importing nations.

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