EMERGING MARKETS-Korean stocks surge on AI boost; Thai assets steady after rate hold

By Roshan Thomas

Oct 28 (Reuters) - South Korean stocks rallied on AI-fuelled gains in technology shares, while Thailand's assets were little changed after the central bank delivered an expected hold on interest rates on Wednesday.

Earnings season has come as a boost for AI stocks globally after recently dropping over questions about whether returns on investments will come fast enough to justify companies' massive expansion plans.

South Korea's KOSPI .KS11 posted its biggest jump in three months on an 11% rise in chipmaker SK Hynix 000660.KS, which posted a stronger-than-expected sevenfold jump in profit and outlined a 100-trillion-won ($75.41 billion) shareholder return plan through 2026.

That helped MSCI's emerging Asia equities index .MIMS00000PUS to advance more than 2.5%. Tech-peer Taiwan's benchmark index .TWII rose 2%, helped by a 1% gain in chip giant TSMC 2330.TW.

In Thailand, the central bank kept interest rates unchanged on Wednesday, extending its pause for a fourth consecutive meeting after cutting borrowing costs by a cumulative 150 basis points between October 2024 and February 2026.

The Bank of Thailand has been prioritising economic growth despite inflationary pressures stemming from the conflict in the Middle East.

However, compared with the previous meeting, the statement appeared to place greater emphasis on inflation risks, while highlighting that the effects of low interest rates on long-term macro-financial stability were being monitored, said Lavanya Venkateswaran, senior ASEAN economist at OCBC Bank.

Thai stocks .SETI were down 0.3%, while the baht inched 0.2% lower.

Elsewhere, Philippine stocks .PSI fell more than 2% as oil prices rose after attacks on a Saudi refinery. O/R

"As a major net oil importer, the Philippines faces a worsening trade-off between containing imported inflation and supporting an already softer economy," DBS Group analysts said in a note.

The peso lingered near a record low, shrugging off President Ferdinand Marcos Jr's remarks that authorities would do all they could to halt further depreciation.

Most currencies across the region retreated against a steady US dollar as investors looked ahead to key central bank decisions. The South Korean won weakened to 1,339.70 per US dollar.

Indonesian assets also remained under pressure, with the rupiah weakening to as much as 18,185 per US dollar, leaving it within touching distance of the all-time low reached in early June.

Stocks in Jakarta .JKSE fell 1.6%.

Indonesian assets have been rocked by fresh bouts of volatility this month after MSCI's plan to potentially downgrade the country to "standalone" market status.

Last week, Bank Indonesia kept its main interest rate unchanged for a fourth straight review, while announcing a gradual cut in the reserve requirement ratio to 7% from 9% and raising its overnight deposit rate by 25 basis points to 5%.

HIGHLIGHTS:

** Danantara bids for stake in Indonesian stock exchange, bourse chief says

** India economic growth seen losing momentum after strong start to fiscal year: Reuters poll

($1 = 1,326.0900 won)