Asia stocks rebound on tech calm, Indonesia benchmark plunges 11% on MSCI downgrade threat

Asian stocks recovered on Friday, recouping some of the prior session’s heavy losses as jitters over AI funding eased, but Indonesia’s equity benchmark cratered 11% — its steepest drop since 1998 — after index provider MSCI said the market no longer qualifies for emerging-market status.

Japan’s tech-heavy Nikkei 225 rose 1.9%, clawing back part of Thursday’s nearly 5% tumble, according to a Reuters report. South Korea’s KOSPI surged 3.3% after an 8% plunge, while Taiwan’s benchmark gained 0.3% and Hong Kong’s Hang Seng added 1%. Mainland Chinese blue chips were little changed. Australia’s S&P/ASX 200 advanced 1.01%, NDTV Profit reported. US stock futures edged higher, with Nasdaq and S&P 500 futures each up 0.2%.

The bounce followed a global sell-off triggered by questions over the debt of AI-focused cloud company CoreWeave. Shares of the Nvidia-backed firm recovered some composure on Thursday after their bond yields had touched levels associated with distressed debt, Reuters reported. The rebound steadied a market unnerved by the financing underpinning the artificial-intelligence boom.

**Indonesia rout deepens**

Indonesia’s equity benchmark slumped 11%, the biggest one-day fall in nearly three decades, after MSCI said it plans to reclassify the market from emerging-market status. The index provider is preparing to cut the country from products tracked by global investors, a move that is likely to trigger capital outflows, according to Reuters.

“The proposal highlights MSCI’s dissatisfaction with the pace of reforms and raises further questions about the investability of the market,” Tan Altundag, investment manager for emerging equities at Pictet Asset Management, told Reuters. “The investment implications could be significant,” he added, noting he has no holdings in Indonesia.

The MSCI assessment dealt a separate blow to the region, which had been under pressure from the tech sell-off, rising US interest-rate expectations, and elevated energy prices.

**Memory makers under pressure**

Analysts also pointed to pressure on memory-chip shares this week after China’s ChangXin Memory Technologies (CXMT) reported progress on a next-generation DRAM architecture that could heighten competition with established manufacturers, Reuters reported. The development added to the sector’s volatility.

“Global markets are getting very noisy once again after a period of low volatility: Wall Street is whipsawing, bond yields are swinging, currency markets are doing backflips, and commodity prices are running in multiple directions,” Kyle Rodda, a markets analyst at Capital.com, wrote in a client note. “Global markets could potentially be in for a protracted period of this sort of volatility,” he added, with tech earnings and interest-rate decisions looming.

**Oil, rates, and currency markets**

Oil prices remained elevated, with Brent crude edging down 0.7% to $105.14 a barrel and US West Texas Intermediate falling 0.7% to $97.26, Reuters reported. Uncertainty over Persian Gulf oil shipments increased after US Central Command confirmed that an Iranian projectile struck a container ship in the Strait of Hormuz, according to NDTV Profit. WTI has outperformed Brent this week as lower shipping costs for US crude supported demand; the cost of transporting a typical cargo from the Gulf Coast to Rotterdam fell about 12% this week, NDTV Profit said, citing Baltic Exchange data.

The Trump administration is considering lifting sanctions on some vessels in the world’s “shadow fleet” that carry oil from Russia, Iran and Venezuela in a bid to cut record freight rates, a US official said Wednesday, Reuters reported.

Federal Reserve Chair Kevin Warsh voiced optimism about US economic strength at the IMF/World Bank meetings in Bangkok on Friday but gave little on the chances of a rate hike this month, saying he does not “prejudge meetings,” Reuters reported. The Bank of England’s Andrew Bailey said the Iran war’s impact on British prices has been limited so far but it was too soon for firm conclusions.

US yields fell this week, sapping dollar demand. The dollar index languished below 102 after a pullback from a 1-1/2-year high near 103, on track for its first weekly loss in five weeks. The euro stood at $1.1226, recovering from a low of $1.1113 on Wednesday. Sterling edged up to $1.3295. The dollar was little changed at 157.86 yen.

Gold inched higher to around $4,173, extending a 1.6% gain from Thursday on safe-haven demand.

In Asia, South Korea’s KOSPI closed at 5,620.35, according to NDTV Profit, while Australia’s ASX 200 ended at 8,807.70. Hong Kong’s Hang Seng and China’s Shanghai Composite were unchanged on the day.

The rebound comes after a week of whipsawing markets driven by tech stock volatility, persistent inflation data (US September CPI rose 0.6% month-on-month and 3.7% year-on-year), and uncertainty over Federal Reserve policy, NDTV Profit reported. Investors now turn to upcoming tech earnings and central bank meetings for direction.