(Sept 15): Emerging Asia stocks fell to a three-week low on Tuesday as rising crude and calls to slow AI development weighed on investor sentiment, while currencies weakened as US rate-hike expectations pushed the dollar to a near two-week high.
The MSCI gauge of emerging market Asian equities fell as much as 1.1% to its lowest since August 25, with South Korea and Taiwan, beneficiaries of AI trade, settling 0.9% and 0.8% lower, after rising earlier.
“Today’s whipsawing is a market in price discovery, not panic — (Anthropic CEO Dario) Amodei’s essay triggered an indiscriminate Monday selloff, and what we’re seeing now is the hangover”, said Junvum Kim, an Asia-Pacific senior sales trader at Saxo Markets.
Overnight, chipmakers on Wall Street dropped after top executives of US AI companies raised safety concerns and called for a slowdown in the development of AI.
Meanwhile, oil prices hovered near a four-month high, deepening inflation concerns in Asia’s energy-reliant economies.
For both South Korea and Taiwan, which run almost entirely on imported crude, higher oil prices mean weaker currencies, rising import costs, and accelerating foreign outflows — all hitting at the exact moment their biggest growth driver is being questioned, Kim said.
Elsewhere, equities of net oil importers such as Thailand and the Philippines fell as much as 0.8% and 1.1%, respectively.
In Indonesia, Southeast Asia’s largest economy, the rupiah fell to 17,703, its lowest in nearly two weeks, while stocks in Jakarta were on track for a fifth consecutive session of losses, losing 1.1%.
Indonesia’s president sacked his finance minister, Purbaya Yudhi Sadewa, on Monday and replaced him with his deputy, Suahasil Nazara, who became the nation’s third finance minister in under two years.
Rising oil prices helped the US 10-year Treasury yields touch 5% for the first time since mid-2007, strengthening bets on a rate hike at the end of the Fed’s two-day meeting on Wednesday. The dollar index was last at 99.617.
That weakened MSCI gauge of EM currencies by 0.4%, extending declines to a fourth straight session.
The Taiwan dollar weakened to as much as 31.906 per dollar, its lowest since Aug 25.
The South Korean won was down 0.9% at 1,359.60, near its late-July low.
The Malaysian ringgit fell nearly 0.2% to 4.08 per dollar, its weakest level since Aug 17.
Uploaded by Magessan Varatharaja
