BENGALURU: South Korean and Thailand equities tumbled on Friday after new US tariffs on auto imports jolted car and auto parts makers, while participants in Asian emerging markets braced for the reciprocal US tariffs set to take effect next week.
Thailand’s benchmark index slid 1% to a one-week low and the baht weakened 0.4%, as Southeast Asia’s biggest auto production centre and an export base for top car makers stood exposed to the new US auto tariffs.
“The US’s higher import tariffs on automobiles and auto parts will weigh further on Thailand’s ailing economy via an additional drag on the automotive sector,” said Charnon Boonnuch, an ASEAN economist at Nomura, noting that the reciprocal and auto sector tariffs announced were a downside risk to Thailand’s growth outlook.
South Korea’s KOSPI toppled nearly 2% in its second straight day of losses, dragged lower by sharp losses in Hyundai Motor and sister automaker Kia Corp .
The index has lost more than 3% over the past two sessions as the two automakers lost billions of dollars in value.
“Autos account for 9.4% of Asia’s exports to the US, but the exposure is highest for South Korea and Japan,” said Sonal Varma, Chief Economist for India and Asia excluding Japan at Nomura.
Taiwan’s benchmark index also slid nearly 2% to its weakest level since mid-September last year. TSMC, the world’s top contract chipmaker, plumbed to its mid-September low point.
The Korean won and Taiwan’s dollar slipped around 0.3% each.
An MSCI gauge of Asia EM equities skidded 0.8%, while a broader gauge of world EM equities was down 0.7%.
While analysts anticipate limited direct effects from US tariffs on trade-reliant Southeast Asian economies, they remain vulnerable to reciprocal US tariffs and slower growth in the global economy and key trading partners.
Singapore’s Straits Times index (STI) breached the 4,000 level for the first time, led higher by a rally in top banks.
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