Asian Markets Rebound as Chipmakers Recover; Indonesia Slumps 11% on MSCI Downgrade

Asian equities bounced back on Friday after a brutal selloff triggered by worries about the financing of artificial intelligence investments, but Indonesia’s market suffered its worst day in nearly three decades after index provider MSCI moved to strip it of emerging-market status.

Japan’s tech-heavy Nikkei rose 1.9%, recouping some of Thursday’s nearly 5% tumble, according to Reuters. South Korea’s KOSPI climbed 3.3% after a near 8% plunge, while Taiwan’s benchmark added 0.3%. Hong Kong’s Hang Seng gained 1%, and mainland Chinese blue chips were little changed. Australia’s S&P/ASX 200 rose 1.01% to 8,807.70, as reported by NDTV Profit. US stock futures edged higher, with Nasdaq and S&P 500 futures each up 0.2%.

The rebound followed a recovery in shares of Nvidia-backed cloud company CoreWeave, which had triggered a global tech rout earlier in the week. CoreWeave regained some composure on Thursday after its bond yields had hit levels associated with distressed debt, Reuters reported. The selloff had spread across technology shares amid broader concerns about higher US interest rates and the cost of financing AI infrastructure, NDTV Profit noted.

**Indonesia’s Deepening Rout**

Indonesia’s equity benchmark slumped 11%, the steepest fall since 1998, after MSCI said the stock market no longer merited “emerging market” status. The index provider is preparing to cut the Southeast Asian market from a suite of products tracked by global investors, a move likely to trigger capital outflows.

“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,” added Altundag, who has no holdings in Indonesia.

**Bond Markets Stabilize, Dollar Weakens**

Bond markets steadied after yields plunged on Thursday as traders sought safe-haven sovereign debt. Lower US yields sapped demand for the dollar, with the dollar index languishing below 102 after a pullback from a 1-1/2-year high. The index was down 0.3% for the week, giving the euro and sterling some respite.

Gold edged higher to around $4,173 after climbing 1.6% on Thursday amid safe-haven demand, Reuters reported.

**Oil Prices and Geopolitical Risks**

Crude oil prices remained elevated but edged lower on Friday. Brent crude futures eased 0.7% to $105.14 a barrel, while US West Texas Intermediate fell 0.7% to $97.26, according to Reuters. NDTV Profit reported Brent near $106 a barrel and WTI around $97, noting that uncertainty over oil shipments through the Persian Gulf increased after US Central Command confirmed an Iranian projectile struck a container ship that sank in the Strait of Hormuz earlier this week.

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

**Pressure on Memory Makers**

Analysts also pointed to pressure on memory maker shares this week after China’s ChangXin Memory Technologies (CXMT) reported progress on a next-generation DRAM architecture that could intensify competition with established manufacturers, Reuters reported.

**Policy Outlook and Volatility**

Federal Reserve Chair Kevin Warsh voiced optimism about US economic strength at IMF/World Bank meetings in Bangkok on Friday but gave little away on the chances of a rate hike this month, repeating that he does not “prejudge meetings,” Reuters reported. Meanwhile, stronger-than-expected US inflation data—consumer prices rose 0.6% in September and 3.7% year-on-year—has raised the prospect of further Fed rate increases, according to NDTV Profit.

“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 cited by Reuters. “Global markets could potentially be in for a protracted period of this sort of volatility,” he added, with tech earnings due in coming weeks and markets trying to gauge the trajectory of key interest rates.

The mixed regional outlook reflects a fragile recovery in tech-heavy markets alongside deep distress in Indonesia, while elevated oil prices and monetary policy uncertainty keep global investors on edge.