Indonesian shares were set to post their worst month in nearly two decades on Friday. A downgrade warning from MSCI deepened a market rout that left the rupiah hovering near record lows.
Why Are Indonesian Shares Down 18% This Month?
The country’s benchmark stock index has fallen 18% this month. Bond yields are near six-year highs, and the currency is lingering near the record lows hit in early June.
Jakarta unveiled fresh market-support measures, but investors remain cautious. Analysts warn that volatility could persist until there is greater clarity on Indonesia’s status on the MSCI index and the direction of fiscal policy.
How Far Did Korea and Taiwan Fall on the AI Retreat?
MSCI’s emerging Asia equities index fell 1.6% on Friday. South Korea’s KOSPI dropped 3.5%, while Taiwan’s benchmark index lost 2.5%.
Disappointing earnings from technology heavyweights hastened a rotation out of AI-linked trades. Investors are increasingly scrutinising whether companies can sustain the heavy spending needed to fund their AI ambitions.
Samsung Electronics extended losses to trade 3% lower. The stock fell a day after reporting a 15-fold jump in chip profit, but it offered no fresh shareholder-return measures and an outlook that disappointed investors. Rival SK Hynix fell 7.1%.
Overnight, the tech-heavy Nasdaq shed more than 1%. Shares of Google parent Alphabet tumbled on weak results and a sharp increase in spending.
“I wouldn’t say investors are abandoning the AI trade just yet. The demand is still there, but the market is becoming a lot more selective about where it puts its money,” said Dilin Wu, research strategist at Pepperstone. “And after such a strong run in AI-related stocks, there’s much less room for disappointment.”
Why Did the Ringgit Hit Its Strongest Level Since September 8?
The Malaysian ringgit appreciated to 4.046 against the dollar. That is its strongest level since September 8.
The dollar index, which measures the US currency against a basket of peers, was a shade weaker at 101.72. That lent some support to regional currencies.
The South Korean won rose to 1,332.51 a dollar, on track for a fourth consecutive monthly gain in October. The won has benefited from booming semiconductor exports and AI-related investment. It has staged a four-month rally after sliding more than 7% in the first half of the year.
Which Other Asian Markets Slipped, and Why?
Singapore stocks slipped about 0.2%, while the Philippine benchmark index fell about 0.4%. Singapore’s third-quarter layoffs reached their highest level since 2020.
The Philippines’ trade deficit widened to US$5.15 billion in September. Crypto exchange Binance froze assets after a US$6.3 billion security breach, according to Reuters.
The Bank of Japan kept its interest rates steady on Friday. It declared victory in a nearly 14-year battle to hit its price target, but signalled vigilance against inflationary risks. That leaves scope to hike borrowing costs as early as December.
Where Do Malaysian Investors Fit? The Ringgit Is the Only Local Number
The report names no Bursa Malaysia-listed company, so there are no local share prices, earnings or dividends to assess. The ringgit’s move to 4.046 is the only Malaysian figure in the story.
Analysts note that the Indonesia MSCI decision and the Samsung and SK Hynix outlooks are the key variables. Investors may want to watch the rupiah and the won as a gauge of regional risk appetite. For a broader look at how tools handle this kind of data, see AI Stock Analysis for Malaysians.
Key Takeaways
- Indonesian shares are down 18% this month, heading for their worst month in nearly two decades.
- MSCI’s emerging Asia index fell 1.6%, with KOSPI down 3.5% and Taiwan’s index down 2.5%.
- Samsung Electronics fell 3% despite a 15-fold jump in chip profit, as it gave no fresh shareholder-return measures.
- The ringgit strengthened to 4.046 against the dollar, its strongest since September 8.
This article is for general information only and does not constitute investment advice. Always do your own research before making any investment decision.
Frequently Asked Questions
Why are Indonesian shares falling this month?
Indonesian shares are down 18% this month after a downgrade warning from MSCI deepened the sell-off. The rupiah is near record lows, and bond yields are near six-year highs.
How much did the ringgit strengthen against the US dollar?
The ringgit appreciated to 4.046 against the dollar on Friday. That is its strongest level since September 8.
Why did Samsung Electronics shares fall after a 15-fold jump in chip profit?
Samsung Electronics fell 3% because it offered no fresh shareholder-return measures and gave an outlook that disappointed investors. The stock dropped a day after reporting the profit jump.
Why did South Korea’s KOSPI drop on Friday?
The KOSPI fell 3.5% as disappointing earnings from technology heavyweights drove a rotation out of AI-linked trades. Rival SK Hynix fell 7.1% over the same period.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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