Asian stocks extend rebound as chipmakers gain ground; Indonesian stocks fall 11% By Investing.com
Investing.com — Asian stocks rebounded Friday as investors bought struggling technology stocks following a sharp selloff sparked by concerns about debt financing for the artificial intelligence boom and intensifying competition from China.
South Korea’s rose 2.1%, while Japan’s rose 1.7%, recouping some of Thursday’s heavy losses as semiconductor stocks regained ground.
The rose by 1.1%. The rebound follows the KOSPI’s nearly 8% fall on Thursday, which took the index to its lowest level since late July and triggered a circuit breaker amid massive selling among memory chip makers.
Indonesian stocks resisted the regional rally, falling 10.8% to 5,233.00, after falling more than 11% earlier, in their biggest one-day decline since January 1998, after MSCI proposed reclassifying the country from emerging market to standalone market status.
U.S. futures were little changed, indicating a more cautious start after Wall Street currency indexes posted modest gains on Thursday.
Chipmakers Rebound, But AI Funding Problems Persist
South Korean memory chip makers led the rally, rising 2.6% and gaining 0.8%. Japan grew by 3.8%, while it grew by 1.9%. Taiwan’s fell 3.1% and rose 1.1%.
The rebound follows a tech selloff intensified by concerns about the financial risks underlying the AI investment boom, particularly the debt burden of cloud computing companies.
Its shares regained some ground on Thursday after extending Wednesday’s 15.5% fall in early trading, when reports that bond yields had reached distressed debt levels helped fuel a broader global sell-off in AI-related stocks.
The sale also reflects concerns about Chinese competition after ChangXin Memory Technologies (CXMT) announced progress on a next-generation DRAM architecture that could intensify competition with established manufacturers such as SK Hynix and Samsung. CXMT shares rallied nearly 5% on Friday.
That of Hong Kong gained 0.4%, that of China by 0.1% and that of 0.2%. rose 0.7%, even though shares of were down 0.8% although the chipmaker reported record quarterly profits and issued an optimistic revenue outlook.
Indonesia’s rout deepens as MSCI suggests market downgrade
Indonesia’s stock market has resisted the regional recovery, with the Jakarta Composite Index plunging into its biggest one-day fall in nearly three decades after MSCI proposed reclassifying the country from emerging market to standalone market status.
MSCI cited lingering concerns about transparency and market functioning, including opaque shareholding structures and suspected coordinated trading, saying reforms had not made enough progress.
It froze additions of Indonesian securities to its indices in January and will seek feedback until April 2027, with the final decision expected by the end of June next year.
The Indonesian stock exchange said it had taken steps to improve transparency, while chief executive Jeffrey Hendrik sought clarification from MSCI. The benchmark index was already the world’s worst performer this year, with a drop of more than 30% and foreign investors recording net stock sales of $4.7 billion.
Elsewhere in Southeast Asia, it rose 0.6%, while rising 1% and falling 0.6%.
In India, the gained 0.6% and advanced 0.5%.
High US inflation and geopolitical risks keep markets on alert
Stronger-than-expected U.S. consumer and producer inflation data, along with resilient retail sales, raised concerns that price pressures could persist and complicate the Federal Reserve’s policy outlook.
While markets initially increased their bets on further tightening, they later reduced their expectations for a rate hike in October, with attention turning to December.
Chicago Fed President Austan Goolsbee said some inflationary pressures may prove temporary, but persistent demand, including investments in AI data centers, may warrant a firmer policy response. Fed Chairman Kevin Warsh’s comments on Friday in Bangkok will be closely watched for clues on the rate outlook.
Meanwhile, escalating tensions between Saudi Arabia and the Houthis and attacks on regional shipping have kept oil supply risks high, despite a possible U.S. decision to ease sanctions on some tankers to reduce freight costs.
The European Union is also preparing new trade powers targeting China, adding another potential source of uncertainty for Asian exporters and regional stocks.
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