(Bloomberg) — Emerging-market stocks extended the week’s declines as risk appetite fluctuated. Investors are watching US-Iran tensions, moves in oil prices and the latest developments in the artificial intelligence trade.

MSCI’s EM equities fell 0.3% by 12 p.m. in London, giving up gains from Asian trading. The equivalent gauge for currencies was down 0.3%, though energy-sensitive components such as the Hungarian forint and the South African rand rebounded.

Risk appetite remained muted as the US struck Iran for a second day. Brent traded near $78 a barrel after swinging between gains and losses, with investors betting that Middle East tensions will be contained.

“Markets are treating renewed US-Iran strikes as another round of managed escalation and that the global economy can continue to absorb the geopolitical shock,” said Elias Haddad, global head of markets strategy at Brown Brothers Harriman.

The Kospi index rose in Seoul, with local chipmaker SK Hynix Inc.’s US listing more than seven times oversubscribed. At the same time, Taiwan Semiconductor Manufacturing Co. and Tencent Holdings Ltd., two other heavyweights in the EM index, declined.

The Taiwan dollar fell to its weakest level since April 2025, erasing gains from last year’s historic rally.

The tech selloff earlier this week following strong earnings from Samsung Electronics Co. showed “expectations were already fully priced in,” said Robert Naess, a portfolio manager at Nordea Investment Management.

“I would call this a valuation reset rather than a fundamental break,” Naess said. “Demand is intact, but the multiples left no room for disappointment.”

The Hungarian forint gained 0.4% against the euro after weakening more than 1% in the previous session on higher oil prices and the publication of the budget outlook by the government in Budapest.

Strategists at Citigroup Inc. took profit on their remaining position in Hungary’s local-currency bonds, saying that the rally following the country’s pro-European turn in April’s election has “largely played out” and the bull case is dampened by this week’s jump in oil prices.