The Iran war triggered a sharp drop in emerging markets, reducing investment attractiveness.

The war situation in Iran has rapidly turned into one of the worst places for global investors. Stocks and bonds that hit historic highs just days ago are now facing downward pressure, with traders assessing how the rise in oil prices and the strength of the US dollar - both shocks triggered by the conflict - will weaken the prospects of some of the world's fastest-growing economies. Asia has been hit hardest by the sell-off, with the South Korean stock market already down 18% this week. This sudden change has raised concerns about whether the value of investing in emerging markets has changed. Top fund managers had been building long positions in Asia, Latin America, and parts of the EMEA region before the war, betting on strong growth, slowing inflation, and loose global monetary policies. Now, the risk of rising energy costs and a strong US dollar has prompted a wave of investors to sell off their holdings.