Emerging Markets: AI-driven tech rally lifts Taiwan, South Korea stocks; Asian currencies retreat
EMERGING MARKETS-AI-driven tech rally lifts Taiwan, South Korea stocks; Asian currencies retreat .
By Roshan Thomas
Oct 28 (Reuters) - Equity markets in Taiwan and South Korea advanced on Wednesday, buoyed by AI-driven gains in technology shares, while regional currencies retreated as the US dollar inched higher.
MSCI's emerging Asia equities index .MIMS00000PUS gained more than 2.4%, led by a nearly 7% surge in South Korea's KOSPI .KS11.
Shares of SK Hynix 000660.KS rose 11% after the South Korean chipmaker posted a stronger-than-expected sevenfold jump in profit and outlined a 100-trillion-won ($75.41 billion) shareholder return plan through 2026.
The upbeat mood spilled over into technology shares ahead of earnings from Alphabet GOOGL.O and Microsoft MSFT.O later in the day, with Amazon.com AMZN.O scheduled to report on Thursday.
Taiwan's benchmark index .TWII rose 1.6%, helped by a 1.3% gain in chip giant TSMC 2330.TW.
Elsewhere, Philippine stocks .PSI fell more than 2% as oil prices rose after attacks on a Saudi refinery, with the energy-importing economy seen as particularly vulnerable to higher fuel costs. O/R
Meanwhile, currencies across the region retreated against a firmer US dollar =USD as investors looked ahead to key central bank decisions, with the Federal Reserve widely expected to keep interest rates on hold.
The South Korean won KRW= weakened to 1,339.70 per US dollar, while the Philippine peso PHP= hovered near an all-time low and was last down 0.1%.
Indonesian assets, however, also remained under pressure, with the rupiah IDR= near its record low.
The currency weakened 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, as MSCI's plan to potentially reclassify the country to "standalone" market status unsettled investors and fuelled a sharp selloff in equities.
Fadhlan Banny, an equity research associate at Samuel Sekuritas Indonesia, expects the rupiah's depreciation to persist as sizeable foreign outflows continue ahead of MSCI's consultation.
The country's appeal to foreign investors has diminished as equity gains have been increasingly eroded by the rupiah's depreciation, Banny added.
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%.
Meanwhile, investor focus turned to the Bank of Thailand, which is widely expected to keep its key interest rate unchanged later in the day and remain on hold through 2027, as sluggish economic growth continues to outweigh inflation concerns.
Unlike many of its global peers that have tightened monetary policy in response to inflationary pressures linked to the conflict in the Middle East, Thailand's central bank has kept policy accommodative since February to support the fragile economy.
The baht THB=TH was flat, while stocks .SETI lost 0.3% ahead of the policy decision.
HIGHLIGHTS:
** Indonesian 10-year benchmark yields at 7.454%
** Ambani's Jio to make Mumbai trading debut after record $3.2 billion India IPO
** Indonesia's bond auction bids halve, raising $1.14 billion, below target
Asia stock indexes and currencies at 0357 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | +0.00 | -0.82 | .N225 | 1.59 | 27.68 |
China | CNY=CFXS | -0.01 | +4.81 | .SSEC | 0.72 | -7.42 |
India | INR=IN | +0.05 | -5.47 | .NSEI | -0.32 | -13.21 |
Indonesia | IDR= | -0.15 | -8.27 | .JKSE | -1.29 | -39.88 |
Malaysia | MYR= | +0.17 | -0.59 | .KLSE | -0.07 | -4.13 |
Philippines | PHP= | -0.15 | -8.06 | .PSI | -1.93 | -6.66 |
S.Korea | KRW= | -0.91 | +7.55 | .KS11 | 6.37 | 42.31 |
Singapore | SGD= | -0.04 | +0.30 | .STI | 0.10 | 16.28 |
Taiwan | TWD=TP | -0.09 | -3.21 | .TWII | 1.64 | 61.76 |
Thailand | THB=TH | -0.27 | -7.04 | .SETI | -0.03 | 25.00 |
($1 = 1,326.0900 won)
(Reporting by Roshan Thomas in Bengaluru; Editing by Sherry Jacob-Phillips)
((Roshan.Thomas@thomsonreuters.com))
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