Asian stocks drop on tech selloff

The MSCI gauge of emerging Asian equities slid 0.5%, pressured by a 1.7% decline in KOSPI index, while a broader gauge of Asian equities excluding Japan dropped almost 2%

South Korean equities extended declines on Friday as investors continue to retreat from tech stocks, while Indonesian shares dropped more than 2%.

The MSCI gauge of emerging Asian equities slid 0.5%, pressured by a 1.7% decline in KOSPI index, while a broader gauge of Asian equities excluding Japan dropped almost 2%.

In Seoul, chipmakers Samsung Electronics and SK Hynix shed 1.2% and 0.2%, respectively, sending the information technology gauge around 2.4% lower.

Markets were jolted this week after AI firm Anthropic unveiled a new legal tool for its Claude chatbot, raising worries over broader disruption to information technology and software service sector.

In Southeast Asia, Jakarta Composite Index slipped 2% in early trade and the rupiah weakened to 16,885 per U.S. dollar, its lowest point since January 22.

Investor confidence in Indonesia has taken a hit due to growing concerns around policy uncertainty under President Prabowo Subianto, including a widening fiscal deficit and central bank independence.

Foreign investors pulled $1 billion from equities in 2025, according to exchange data. Outflows have accelerated since mid-last week after MSCI warned of a potential downgrade to frontier-market status.

In the near-term, onshore financial markets are likely to witness knee-jerk weakness due to the outlook change, with much onus on the domestic policy response thereafter, DBS analysts wrote.

An outlook change doesn’t carry immediate changes in rating-sensitive investment mandates, although there might be lower appetite to build additional exposure, besides a higher preference for shorter-tenor papers, they added.

Stocks in Malaysia, the Philippines and Taiwan were largely unchanged, while Singapore shares slid 0.7% and Thailand’s SET Index gained 0.5%.