BENGALURU: Emerging Asian stocks fell sharply on Friday, while regional currencies steadied, as traders cut risk exposure after US jobs data failed to clarify the Federal Reserve’s policy path.
The MSCI emerging Asia stock index dropped 2.7 percent, erasing Thursday’s 1 percent gain and putting it on track for its worst week since April 4, when it fell 3.6 percent after fresh US tariff actions by President Donald Trump.
Singapore’s Straits Times Index dipped more than 1 percent on the day, with utility firm Sembcorp Industries among the biggest decliners, down 3.2 percent. Bangkok stocks fell 1.9 percent to their lowest point since September 5, while Kuala Lumpur shares were down 0.2 percent.
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 percent earlier in the session, erasing the 3.5 percent gains fuelled by Nvidia in the previous session.
The benchmark ended 3.8 percent lower and has fallen nearly 4 percent this week, marking its worst weekly performance since late February.
South Korean heavyweights Samsung Electronics and SK Hynix lost 6.1 percent and 10 percent, 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 3.5 percent this week, in its worst showing since early April, fell 3.6 percent on Friday, with TSMC sliding 4.8 percent.
Indonesia stocks edged 0.2 percent 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 rupiah edged 0.1 percent higher on the day.
Other currency markets in the region were mixed against a dollar index that edged lower on Friday.
The Malaysian ringgit rose 0.2 percent, while the Taiwan dollar slipped 0.5 percent to its weakest level since May 2.
The South Korean won slipped 0.2 percent, while most other regional currencies were little changed.