Chipmakers Lead Asia Rebound as Indonesia Slumps 11% on MSCI Emerging-Market Cut

Asian equities rebounded on Friday, led by a recovery in chipmakers after this week's tech-driven selloff, while Indonesia's rout deepened with its benchmark plunging 11%.

The drop — Indonesia's steepest since 1998, according to Reuters — followed MSCI's determination that the stock market no longer merits "emerging market" status. The index provider is preparing to cut the Southeast Asian market from a suite of products tracked by global investors, a setback likely to accelerate outflows.

"The proposal highlights MSCI's dissatisfaction with the pace of reforms and raises further questions about the investability of the market," said Tan Altundag, investment manager for emerging equities at Pictet Asset Management, who has no holdings in Indonesia. "The investment implications could be significant."

Japan's Nikkei gained 1.9% to claw back part of Thursday's nearly 5% tumble, while South Korea's KOSPI climbed 3.3% following a plunge of almost 8%, Reuters reported. Taiwan's benchmark rose 0.3%, Hong Kong's Hang Seng added 1%, and mainland Chinese blue chips were little changed. Pan-European STOXX 50 futures advanced 0.7%, while Nasdaq and S&P 500 futures each edged up 0.2%.

The rebound followed heavy selling in the previous session, when investors dumped tech shares over questions about the debt pile of cloud company CoreWeave, fuelling worries about the financing behind the AI boom. Shares of Nvidia-backed CoreWeave recovered some composure on Thursday after extending Wednesday's 15.5% slump amid reports that its bond yields had reached levels associated with distressed debt, Reuters said.

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

The cross-asset turbulence shows no sign of settling, said Kyle Rodda, a markets analyst at Capital.com. "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."

"Global markets could potentially be in for a protracted period of this sort of volatility," he added, with tech companies due to report earnings in coming weeks and markets attempting to gauge the trajectory of key interest rates.

On Wall Street, the S&P 500 and Nasdaq Composite ended a three-session losing streak on Thursday, with the Dow Jones Industrial Average rising more than 500 points, or about 1.1%, according to NDTV Profit. The S&P 500 gained 0.3% and the Nasdaq edged up 0.1%. Australia's S&P/ASX 200 rose 1.01% to 8,807.70, NDTV Profit reported.

Rates remained a central concern. Federal Reserve Chair Kevin Warsh voiced optimism about US economic strength at the 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." Bank of England Governor Andrew Bailey said soaring energy prices caused by the Iran war appeared to be having limited wider effects on British prices so far, but it was too soon to draw firm conclusions.

US consumer prices rose 0.6% in September from the previous month and 3.7% from a year earlier, with higher fuel costs contributing, and underlying inflation also exceeded expectations, NDTV Profit reported. The prospect of tighter monetary policy has weighed on technology shares as investors assess whether higher borrowing costs could constrain spending on AI infrastructure.

Currency and bond markets reflected the shifting rate outlook. Bond markets stabilised after yields plunged on Thursday as traders bought Treasuries and other safe-haven sovereign debt. Lower US yields have sapped demand for the dollar, with the dollar index languishing below 102 after pulling back from Wednesday's 1-1/2-year high near 103; Reuters said the index was down 0.3% for the week and heading for its first weekly loss in five weeks. The euro stood at $1.1226 after touching $1.1113 on Wednesday; sterling edged up to $1.3295, and the dollar was little changed at 157.86 yen. Gold inched higher to around $4,173 after climbing 1.6% on Thursday on safe-haven demand.

Oil prices were mixed. Brent crude futures eased 0.7% to $105.14 a barrel, while US West Texas Intermediate fell 0.7% to $97.26, Reuters reported — though NDTV Profit noted Brent was near $106, up almost 1% for the week. Prices have been supported by the escalating conflict between Saudi Arabia and Yemen's Houthis and renewed attacks on shipping in the region. Uncertainty over the restoration of oil shipments through the Persian Gulf increased after US Central Command confirmed on Thursday that an Iranian projectile struck a container ship that sank in the Strait of Hormuz earlier this week, NDTV Profit reported.

The Trump administration is considering lifting sanctions on some vessels in the world's "shadow fleet" that carried oil and petroleum products from countries including Russia, Iran and Venezuela, in a bid to cut record global freight rates, a US official said on Wednesday, according to Reuters. The cost of shipping a typical US crude cargo from the Gulf Coast to Rotterdam has fallen about 12% over the past week, NDTV Profit said, citing Baltic Exchange data.