Emerging Markets: Asia hammered by unwinding AI trade; Taiwan set for worst week since 1999

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Yesterday 04:45

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Taiwan equities on course for worst week since July 1999
MSCI EM index falls to lowest since April
Indonesia stocks fall ahead of next week's MSCI review
By Roshan Thomas
Nov 6 (Reuters) - Asian stocks slid on Friday, lashed by a fresh wave of selling in chipmakers that drove tech-heavy shares in Taiwan to their lowest in more than six months, while South Korean equities fell nearly 9% to trigger a circuit breaker.
Global financial markets have seesawed this week as hopes that a Democratic sweep in US elections would hasten an end to the Iran war shrivelled in the face of mounting concern over tighter regulation of data centres. 
The global tech selloff caused the Nasdaq's steepest one-day drop since April's "Liberation Day" rout, with fears of greater scrutiny of AI investments and data-centre projects spilling over into tech-heavy markets across emerging Asia.
MSCI's emerging markets index .MSCIEF fell 4.7% to its lowest since early April, dragged down by sharp declines in technology stocks across north Asia.
"To me, there is a clear element of panic in the selling, with crowded positioning, deleveraging and potentially forced liquidations amplifying the decline," said Dilin Wu, research strategist at Pepperstone.
South Korea's KOSPI .KS11 tumbled as much as 8.8%, triggering a circuit breaker, but recouped some losses to trade down 4.7%. Chipmaking heavyweights Samsung Electronics 005930.KS and SK Hynix 000660.KS both fell more than 10%.
South Korea's Finance Ministry said markets were overreacting to external developments and vowed to respond and dampen investor anxiety.
Taiwan's benchmark index .TWII pared steep early losses to trade down 4.7% after an earlier plunge of as much as 8.3%. The index stands more than 20% below record highs in early October and is on track for its worst weekly decline since July 1999.
"What concerns me is that the underlying pressure hasn't really gone away," Wu added. "Foreign investors have been heavy sellers in Taiwan, and the broader unwind in global AI positioning may not be over yet." 
In currency markets, the South Korean won KRW= and the Taiwan dollar TWD=TP inched down 0.1%, as sustained foreign selling of Taiwanese equities weighed on the currency.
Elsewhere, moves in regional currencies were subdued, with the Thai baht THB=TH and Singapore dollar SGD= both weakening 0.2%.
Singapore stocks .STI tumbled 2.3%, weighed down by the city-state's lenders, with DBS DBSM.SI and United Overseas Bank UOBH.SI extending losses after weaker-than-expected earnings earlier in the week.
Shares of OCBC OCBC.SI also edged lower even after the bank raised 2026 guidance following a third-quarter profit beat.
Indonesia's rupiah IDR= kept within striking distance of its June record low, while stocks .JKSE fell 2%, as investors watch for MSCI's November index review, due next week to gauge the market's standing in the benchmark provider's indexes.

HIGHLIGHTS:
** Indonesian 10-year benchmark yields at 7.740%
** Thai October headline CPI rises 3.90% on year, highest level in nearly 4 years
** Japan's Nikkei slumps more than 5% as market rout deepens on AI worries

 
Asia stock indexes and currencies at 0333 GMT
COUNTRY
FX RIC
FX DAILY %
FX YTD %
INDEX
STOCKS DAILY %
STOCKS YTD %
Japan
JPY=
-0.11
-0.75
.N225
-5.27
14.94
China
CNY=CFXS
-0.01
+4.79
.SSEC
-1.07
-8.02
India
INR=IN
-0.02
-4.89
.NSEI
0.00
-6.10
Indonesia
IDR=
-0.28
-8.03
.JKSE
-1.96
-42.97
Malaysia
MYR=
-0.32
-0.02
.KLSE
-1.28
-3.88
Philippines
PHP=
-0.08
-6.63
.PSI
-0.27
-4.79
S.Korea
KRW=
-0.13
+5.87
.KS11
-4.72
21.73
Singapore
SGD=
-0.20
+0.43
.STI
-2.44
11.20
Taiwan
TWD=TP
-0.14
-4.50
.TWII
-4.78
36.67
Thailand
THB=TH
-0.16
-6.01
.SETI
-1.28
17.40

Graphic: World FX rates  https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
 (Reporting by Roshan Thomas in Bengaluru; Editing by Thomas Derpinghaus and Clarence Fernandez)
 ((Roshan.Thomas@thomsonreuters.com))