(Bloomberg) — Emerging-market benchmarks for stocks and currencies posted small gains in holiday-thinned trade, with most markets in Asia, Europe and Africa closed for Labour Day. 

The MSCI Emerging Markets Index rose 0.2%, with United Arab Emirates stocks, including First Abu Dhabi Bank PJSC and ADNOC Drilling Co. contributing most to the gains. However, trading volumes in the gauge’s companies were 99.8% lower than their 30-day average. The currency index rose 0.2%, helped by gains in the South Korean won and Polish zloty.

Emerging-market assets are completing a turbulent week when they repeatedly swung between optimism for an end to the Middle Eastern conflict and concerns over the inflationary impact of oil-price surges. While lingering geopolitical risks have pushed volatility to the highest in more than three years, equity valuations and carry trades are keeping many investors bullish over the medium-term outlook.  

“Tensions in the Middle East could escalate again in the near term, but the hit to global economic growth is likely to be contained,” Cassidy Ainsworth-Grace, a macro strategist at Oxford Economics, wrote in a note. “EM earnings momentum will remain positive over the next 12 months, driving stocks higher.”

With earnings estimates for the MSCI index at a record high, analysts have also upgraded their target level for the gauge 12 months from now to a record, implying a 22% gain by April 2027.

In currency markets, Korea’s won rose for a second day, capping a weekly gain. The zloty advanced 0.1% against the euro. Traders focused on cues for the dollar from Japan, where the yen soared after authorities intervened in the foreign-exchange market.

Hungary’s forint fluctuated between gains and losses. The eastern European nation has released previously undisclosed details of a €1 billion ($1.2 billion) loan that outgoing Prime Minister Viktor Orban’s government took from China in 2024, news website 444.hu reported Friday.

Romania’s leu extended losses to a fifth day amid an escalating political crisis. This week’s declines were the biggest since May 2025.

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