EMERGING MARKETS-Asian stocks slide to 3-month low as tech selloff spurs risk aversion

By Reuters News

By Sneha Kumar

- Emerging Asian equities fell on Friday, lingering near a three-month low as investors dumped regional technology stocks and piled into safe havens such as US Treasuries and the yen on worries about AI's unsustainable funding needs.

MSCI's emerging Asia equities index .MIMS00000PUS fell 0.3% to its weakest level since late July and was on track for a fourth consecutive weekly loss.

The selloff followed a 2.6% slide in the tech-heavy Nasdaq .IXIC after Meta META.O posted its first cash outflow in more than a decade due to AI-related expenditures. .N

In South Korea, a 0.4% decline in Samsung Electronics 005930.KS dragged the benchmark KOSPI .KS11 down 1.2% to a nearly three-month low.

The South Korean won strengthened to 1,324.47 per dollar, hovering near a two-year high and poised for a weekly gain of 0.8%.

Asia's oil importers stayed on edge after crude prices jumped 5% on Thursday, even as investors piled into safe-haven bonds, sending the 10-year US Treasury yield down 19.3 basis points in its biggest daily drop since March 2023 and keeping it below the closely watched 5% level.

The Japanese yen climbed to its strongest level in more than a month as deteriorating risk appetite drove investors toward safe-haven assets. JPY/

"This (trend in oil and Treasuries) may signal a shift in market concerns: from the inflationary impact of higher oil prices towards the combined threat that elevated energy costs, tighter financial conditions and deteriorating risk appetite pose to economic growth," said Dilin Wu, research strategist at Pepperstone.

"The market's focus is shifting from questioning returns on AI investment towards a broader emphasis on capital preservation."

Elsewhere in Asia, Singapore shares .STI edged lower, while Malaysia's benchmark index .KLSE slipped 0.2%.

Philippine shares .PSI extended declines with a 1% drop, a day after the central bank delivered an outsized rate hike to rein in sticky inflation.

The Philippine peso recovered marginally to 63.379 per dollar from the record low of 63.502 touched on Thursday, though it lost about 0.7% so far this week.

"The focus of (Philippine) policy remains largely on containing inflation while growth concerns remain in the back seat," Citi analysts wrote.

Indonesian stocks .JKSE rose 1.1%, extending gains to about 8% over the last four sessions, though the index remains roughly 7% below levels seen before MSCI warned of a possible downgrade to "standalone" status from "emerging market".

The rupiah slipped to 18,075 a dollar, its weakest level since late July.

The movement of the rupiah remained manageable following MSCI's warning last week, an official at Indonesia's central bank said.

Markets in Taiwan were closed on Friday ahead of the arrival of Typhoon Champi, while Thailand's stock market .SETI was shut for a public holiday.


HIGHLIGHTS:

** Indonesia's 10-year bond yield at 7.446%

** SK Hynix puts US IPO of chip unit Solidigm on "hold" after Seoul authorities raise concerns

** China's yuan holds steady, set for fourth weekly rise



Asia stock indexes and currencies at 0427 GMT

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

-0.06

-0.13

.N225

-0.82

-23.94

China

+0.03

+4.72

.SSEC

-1.20

-8.94

India

-0.01

-5.23

.NSEI

0.12

-13.07

Indonesia

-0.17

-7.77

.JKSE

1.08

-37.02

Malaysia

-0.04

-0.65

.KLSE

-0.18

-4.45

Philippines

+0.08

-7.22

.PSI

-1.01

-5.47

S.Korea

+0.08

+8.71

.KS11

-1.20

29.73

Singapore

-0.04

+0.61

.STI

-0.10

16.44

Taiwan

-

-3.29

.TWII

-

58.96

Thailand

+0.03

-6.73

.SETI

-

24.05

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