HONG KONG: Asian equities slipped on Friday while currencies held steady, as traders stayed on the sidelines after US jobs data offered little clarity on when the Federal Reserve might ease policy.
The MSCI index of Asian emerging-market equities dropped 2.6 per cent, erasing the 1 per cent gain from the previous session, while the MSCI Asia-Pacific ex-Japan index eased 2.4 per cent.
The sharp shift in sentiment followed concerns over lofty valuations and rising tech spending, which weighed on a rally fuelled by AI darling Nvidia’s positive outlook and stronger-than-expected US September jobs data.
However, a higher US unemployment rate and downward revisions to previous months have left the Fed with an uncertain outlook as it considers a potential rate cut next month.
“The best explanation for the sell-off in the markets today is related to monetary policy uncertainty. While the chances of a cut are marginally higher, the markets are still implying a line ball decision in December,” said Kyle Rodda, a senior financial market analyst at Capital.com.
South Korea‘s KOSPI slumped 4.2 per cent earlier in the session, erasing the 3.5 per cent gains fuelled by Nvidia from the previous session. The benchmark was last down 3.9 per cent and has fallen 4 per cent this week, marking its worst weekly performance since late February.
South Korean heavyweights Samsung Electronics and SK Hynix lost 6.1 per cent and 10 per cent, respectively. “In Korea, Samsung and SK Hynix are under outsized pressure because the memory-chip rally is now facing a potential supply-side shift, reports of buyers diversifying toward Chinese DRAM suppliers have amplified concerns that current pricing strength may be peaking,” said Tareck Horchani from Maybank Securities.
Taiwan’s tech-heavy index, down 3.4 per cent so far this week in its worst showing since early April, fell 3.7 per cent on Friday, with TSMC sliding nearly 5 per cent.
Singapore’s Straits Times Index slipped more than 1 per cent, with utility firm Sembcorp Industries among the biggest decliners, down 3.7 per cent.
Bangkok stocks fell 1.6 per cent to their lowest point since September 5, while Kuala Lumpur was down 0.1 per cent. Indonesia’s Jakarta Stock Exchange edged 0.3 per cent lower, capping a week in which the central bank held rates steady as expected, prioritising the transmission of earlier cuts amid renewed rupiah weakness that complicates its easing path. The Indonesian currency edged 0.1 per cent higher on the day.
Other currency markets in the region were stable against a steady dollar index on Friday. The Philippine peso and the South Korean won inched up 0.2 per cent and 0.1 per cent, respectively, while the Malaysian ringgit was up 0.3 per cent.
© New Straits Times Press (M) Bhd
