Asian stock markets extended their rebound on Friday, with technology shares, particularly in the chipmaking sector, leading the charge. Investors were seen buying back into beaten-down tech stocks following a sharp selloff in the previous session. This recovery was supported by gains in South Korea's KOSPI, which climbed 2.1%, and Japan's Nikkei 225, which advanced 1.7%. The MSCI Asia Pacific index also saw a rise of 1.1%.
The rebound in tech was partly fueled by a recovery in major chipmakers. Samsung Electronics gained 2.6%, and SK Hynix rose 0.8% in South Korea, while Japan's Kioxia advanced 3.8%. This followed a global tech selloff that had been exacerbated by concerns over the financial stability underpinning the artificial intelligence boom, particularly the debt levels of companies like CoreWeave. Federal Reserve Governor Kevin Warsh also provided some optimism, stating that AI could bring significant long-term benefits to the global economy, though acknowledging the path might be bumpy.
In stark contrast to the regional recovery, Indonesia's stock market experienced a severe downturn. The Jakarta Composite Index plunged 10.8%, marking its steepest one-day decline since January 1998. This sharp fall was triggered by MSCI's proposal to reclassify Indonesia from an emerging market to a standalone market status. Investors reacted with concern to MSCI's expressed dissatisfaction with the pace of reforms and lingering questions about market transparency and governance. The potential reclassification has raised fears of significant foreign capital outflows, with some estimates suggesting billions of dollars could be withdrawn from the Indonesian market. MSCI is expected to make a final decision on the reclassification by June 2027.
