Emerging Markets: Asian markets slide as oil surge, fragile US-Iran talks fuel inflation fears

Taiwan Semiconductor Manufacturing Co

15/05/2026 06:53

KOSPI briefly surpassed key 8,000 mark

Both U.S. and China want Strait of Hormuz kept open

Malaysia Q1 growth beats projections

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By Sneha  Kumar and Sruthi Narasimha Chari

May 15 (Reuters) - Emerging Asian markets fell sharply on Friday as surging oil prices and limited progress in U.S.-Iran peace negotiations heightened concerns over inflation and economic uncertainty.

MSCI's emerging Asia equities gauge .MIMS00000PUS dropped 1.7%, led by a steep decline in South Korea's KOSPI .KS11, which tumbled more than 5% and triggered a sidecar curb, temporarily halting automated trading for five minutes.

The benchmark briefly crossed the 8,000 mark but reversed course on heavy losses in major chipmakers, with Samsung Electronics 005930.KS falling 6% and SK Hynix 000660.KS sliding 5.5%.

Despite limited progress in U.S.-Iran talks, the mere prospect of a truce helped lift the regional benchmark index by nearly 20% since late March, when reports of a potential ceasefire first emerged.

"We see today's pressure more as markets digesting the strong recovery rally since April, rather than a decisive shift into broad risk-off," said Song Zhe, senior Asia and global EM equities investment specialist at BNP Paribas Asset Management.

"Positioning had become more comfortable, so some profit-taking is understandable."

Investor focus remained on Beijing where U.S. President Donald Trump is due to conclude his two-day state visit on Friday, with Trump and China's Xi Jinping having agreed that they oppose Iran acquiring nuclear weapons and "want the straits open".

Oil prices continued to rise on Friday, heading for a weekly gain of more than 5% after Trump said Beijing wants to purchase oil from Washington. O/R

Traffic through the critical Strait of Hormuz remains constrained, despite Iran saying about 30 vessels had passed through it, keeping energy-reliant Asian economies on edge.

Philippine equities .PSI slipped 0.7%, with Jollibee Foods JFC.PS down 2.3% and set to close the week nearly 17% lower, a performance not seen since May 2020.

The fast-food group posted weaker earnings, flagged an uncertain business outlook, and was removed from MSCI's Philippine global standard index.

Taiwan shares .TWII fell 0.8% after briefly touching a record level, dragged lower by a 0.4% drop in TSMC 2330.TW, the world's top contract chipmaker.

Meanwhile, Malaysia's economy expanded faster than projected in the first quarter, supported by resilient domestic demand that helped cushion shocks stemming from the Middle East conflict.

Malaysia's central bank slightly raised its 2026 growth forecast, although it expects headline inflation to accelerate this year.

Malaysian shares .KLSE slipped 0.4%, while the ringgit MYR= depreciated 0.4% as well, in line with broader regional currency moves.

The dollar index USD= was on course for a weekly advance of more than 1%, its best performance since early March, putting pressure on Asian currencies including the Philippine peso PHP= and South Korean won KRW=KFTC. USD/

Both currencies are on course to post weekly losses of around 2% each.

Indonesian markets were closed for a public holiday.

HIGHLIGHTS:

** Samsung Elec execs urge union to resume pay talks, apologise to public.

** Malaysia lowers June crude palm oil reference price, maintains duty at 10%.

** South Korea's Lee, Japan's Takaichi to hold summit in Andong on May 19-20.

Asia stock indexes and currencies at 0455 GMT
COUNTRY
FX RIC
FX DAILY %
FX YTD %
INDEX
STOCKS DAILY %
STOCKS YTD %
Japan
JPY=
-0.09
-1.17
.N225
-1.48
22.62
China
CNY=CFXS
-0.13
+2.81
.SSEC
0.12
5.40
India
INR=IN
-0.13
-6.27
.NSEI
0.44
-8.94
Indonesia
IDR=
-
-4.52
.JKSE
-
-22.25
Malaysia
MYR=
-0.35
+2.84
.KLSE
-0.35
3.53
Philippines
PHP=
-0.14
-4.57
.PSI
-0.70
-1.32
S.Korea
KRW=KFTC
-0.29
-3.89
.KS11
-5.24
79.48
Singapore
SGD=
-0.16
+0.61
.STI
-0.08
7.44
Taiwan
TWD=TP
+0.12
-0.11
.TWII
-0.81
42.98
Thailand
THB=TH
-0.42
-3.22
.SETI
-0.68
21.35

 (Reporting by Sneha Kumar in Bengaluru; Editing by Sherry Jacob-Phillips)

 ((Sneha.kumar@thomsonreuters.com))