Asian Markets Rebound After AI Sell-Off and Currency Volatility
Asian stock markets recovered from a technology-led sell-off on Friday, though Indonesia's benchmark slumped following an MSCI emerging market status downgrade.
Major Asian stock indices rebounded on Friday after a global sell-off in technology shares triggered by debt concerns at AI cloud company CoreWeave. Japan's Nikkei rose 1.8 per cent and South Korea's KOSPI climbed 2.8 per cent, recovering from a period of extreme volatility that had previously triggered circuit breakers in South Korea and caused Japan's worst trading day since March.
Prior to the recovery, central banks across Asia intervened in foreign exchange markets on October 15 to stabilize local currencies during the AI-driven unwind. The Reserve Bank of India supplied US dollars to onshore and offshore markets, while Bank Indonesia intervened to steady the rupiah. In Taiwan, state-owned banks sold US dollars to provide liquidity amid a record $9.3 billion foreign exodus from equities.
Despite the regional recovery, Indonesia's equity benchmark slumped 11 per cent after MSCI announced plans to remove the country's stock market from its emerging market status. In other global developments, the United States administration is considering lifting sanctions on shadow fleet vessels transporting oil from Russia, Iran, and Venezuela to lower global freight rates, while ongoing conflict between Saudi Arabia and Yemen's Houthis continues to support oil prices.
