BENGALURU: Emerging Asian equities slipped on Friday, hit by a global risk-off wave after hawkish Federal Reserve remarks dimmed hopes of a rate cut next month, with Singapore stocks tumbling from record highs after a three-session surge.
The MSCI index of emerging Asia equities and a broader gauge of Asian shares outside Japan each dropped about 2 percent, while the MSCI ASEAN index fell 0.8 percent. An increasing number of Fed policymakers are striking a more cautious tone on further rate cuts, pointing to persistent inflation and a labour market that has held firm despite two US reductions earlier this year.
Markets have priced in over a 50 percent chance of a hold in interest rates at the Fed meeting in December.
“The moves set up global markets for a bearish end to the week, where thoroughly risk-off sentiment is likely to see risk assets everywhere come under pressure,” said Kyle Rodda, senior financial market analyst at Capital.com.
“The locus of the sell-off is a combination of dialled back Fed rate cut expectations and a loss of momentum behind the AI trade amid fears of inadequate return on investment.”
Singapore’s FTSE Straits Times index fell over 1 percent, pulling back from its record high of 4,575.91 points it hit on Thursday, although it still remained above the 4,500-point mark.
Stocks in Seoul fell as much as 3.8 percent, snapping a four-day winning rally, while equities in Taiwan fell around 1.8 percent, on track for their second session of losses.
In Thailand, shares declined as much as 1.9 percent to their lowest level since September 5.
In Malaysia, the ringgit remained steady with a decline of 0.1 percent to snap an eight-day gaining streak, while equities dipped 0.3 percent. The country’s central bank said the economy expanded at its fastest pace in a year in the third quarter, with growth in 2025 poised to come in at the upper end of its forecast.