Emerging markets-Oil shock, AI capex fears put Asian markets on the back foot

HIGHLIGHTS: * Indian central bank likely steps in to avert rupee record low as oil surges, traders say * BOJ likely to keep inflation warning but expect no big build-up in risks, sources say * Trump to impose 'forced labor' duties on Friday as temporary 10% US tariffs expire * Thai June exports rise 20.8% on year, higher than forecast | Country | FX RIC | FX Daily % | FX YTD % | Index | Stocks Daily % | Stocks YTD % | | --- | --- | --- | --- | --- | --- | --- | | Japan | JPY= | +0.04 | -4.36 | .N225 | -3.13 | 24.13 | | China | CNY=CFXS | +0.02 | +3.12 | .SSEC | -1.20 | -3.49 | | India | INR=IN | +0.04 | -6.90 | .NSEI | -0.68 | -9.27 | | Indonesia | IDR= | -0.45 | -7.23 | .JKSE | -2.30 | -28.64 | | Malaysia | MYR= | -0.12 | -0.88 | .KLSE | -0.54 | 1.50 | | Philippines | PHP= | -0.09 | -4.84 | .PSI | -1.23 | 2.53 | | S.Korea | KRW=KFTC | +0.79 | -1.69 | .KS11 | -6.07 | 58.19 | | Singapore | SGD= | +0.09 | -0.49 | .STI | -0.44 | 19.60 | | Taiwan | TWD=TP | -0.35 | -2.91 | .TWII | -2.58 | 50.85 | | Thailand | THB= | +0.01 | -6.97 | .SETI | -0.29 | 29.89 | Graphic: World FX rates Asian stock markets Philippine stocks .PSI slipped as much as 1.5%, hitting their lowest level since July 6, while Singapore stocks .STI edged 0.4% lower. Among other regional currencies, the South Korean won KRW=KFTC firmed to 1,462.2 per dollar and was set for a near 1.4% gain for the week. Meanwhile, Taiwan's dollar TWD=TP slipped to 32.38 against the greenback, while the Philippine peso PHP= weakened to 61.853, set to log its sixth straight week of losses. Oil topped $100 overnight, reviving inflation concerns across net energy-importing emerging Asian economies as Red Sea attacks and traffic disruptions through the Strait of Hormuz stoked supply fears. O/R In Southeast Asia, shares in Jakarta .JKSE fell as much as 2.4%, set for their weakest intraday session since end-June. The rupiah IDR= also softened, trading a few pips above the closely watched 18,000-per-dollar threshold. "Indonesia is less exposed to AI demand, but oil above $100 threatens inflation, fuel subsidies, the rupiah and bond markets simultaneously, making it the most vulnerable macro story," Yin said. In Malaysia, stocks .KLSE slipped 0.5%, while the ringgit MYR= edged lower to 4.091 against the dollar. DBS, however, remains positive on Malaysian markets, citing benign inflation near its 2% long-run average, stable policy, contained fiscal risks and strong growth. It also cites Malaysia's relative resilience to Middle East commodity shocks as a net oil and gas exporter. July 24 (Reuters) - Emerging Asian equities fell on Friday, with South Korea leading losses, as higher oil prices and worries about returns on heavy AI spending by major U.S. tech companies hit sentiment. South Korea's benchmark KOSPI index .KS11 fell as much as 6.2% after a three-session winning streak, putting it on track for a weekly fall of 2.4%. SK Hynix 000660.KS, the world's leading AI memory chipmaker, and rival Samsung Electronics 005930.KS dropped more than 7% each. Shares in Taipei .TWII declined as much as 2.7%, trimming weekly gains to 2.4%. Wall Street declined overnight after Alphabet GOOGL.O and Tesla TSLA.O, the first of the "Magnificent Seven" to report this earnings season, unsettled investors with steep cash outflows linked to AI infrastructure spending. .N "Concerns over whether hyperscalers can justify massive AI capex are weighing directly on Korea's memory makers and Taiwan's chip supply chain," said Glenn Yin, director of research at ACCM. "Korea is probably the most exposed because it sits at the intersection of both risks: semiconductors dominate exports while the economy is highly dependent on imported energy."

Emerging markets-Oil shock, AI capex fears put Asian markets on the back foot

Reuters highlights and market table

Philippines, Singapore and currency updates

Oil prices and regional currency moves add pressure

Asian equities fall as oil prices and AI spending worries weigh

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