Indonesian shares head for worst month in 18 years as AI retreat hits Korea, Taiwan
SPY•Indonesian stocks were set for their worst month in nearly two decades, with the benchmark down 18% in October after an MSCI warning deepened a rout. South Korea’s KOSPI fell 3.5% and Taiwan’s benchmark dropped 2.5% as investors pulled back from AI-linked trades.
1. Indonesia faces steep decline
Indonesia’s benchmark stock index had fallen 18% this month and was on course for a fourth consecutive monthly decline after an MSCI downgrade warning. The rupiah hovered near record lows, while Indonesian bond yields were near six-year highs. Jakarta unveiled fresh market-support measures, but analysts said volatility could persist until there is greater clarity on Indonesia’s index status and fiscal policy.
2. AI-linked shares retreat
MSCI’s emerging Asia equities index fell 1.6% on Friday, with South Korea’s KOSPI down 3.5% and Taiwan’s benchmark index down 2.5%. Samsung Electronics fell 3% after reporting a 15-fold increase in chip profit but offering no new shareholder-return measures and an outlook that disappointed investors; rival SK Hynix dropped 7.1%. Investors scrutinized whether companies can sustain spending on AI ambitions after disappointing technology earnings.
3. Regional currencies and rates
The Malaysian ringgit strengthened to 4.046 per dollar, its strongest level since September 8, while the South Korean won rose to 1,332.51 per dollar and was on track for a fourth consecutive monthly gain. The Bank of Japan held rates steady and signalled vigilance against inflation risks, suggesting scope to raise borrowing costs as early as December.
