Emerging-market assets remained under strain as stalled US-Iran talks helped send oil prices back above $86 a barrel. The move kept pressure on both stocks and currencies across developing economies, extending a cautious tone in the market.
Higher crude prices can create another challenge for many emerging markets because energy costs feed into inflation, trade balances and government spending. When oil rises, investors often become more selective about risk, and that can weigh on local equities and currencies.
The lack of visible progress in discussions involving the US and Iran appeared to be a key factor behind the rebound in oil. With supply concerns back in focus, traders pushed crude higher, and that added to the difficulties already facing emerging-market investments.
While energy-exporting countries can benefit from firmer oil, the broader emerging-market picture remained pressured in this session. The overall market response pointed to continued concern that elevated oil prices could tighten financial conditions and make the outlook more difficult for import-dependent economies.
