By Sneha Kumar and Roshan Thomas
Feb 6 (Reuters) – South Korean equities extended declines on Friday as investors continue to retreat from tech stocks, while Indonesian shares fell over 2% after Moody’s lowered the country’s credit rating outlook, the latest blow to Southeast Asia’s largest economy.
The MSCI gauge of emerging Asian equities slipped 0.5%, pressured by a 1.7% drop in South Korea’s KOSPI index, while a broader gauge of Asian equities excluding Japan fell as much as nearly 2%.
In Seoul, chipmakers Samsung Electronics and SK Hynix fell 1.2% and 0.2%, respectively, sending the regional information technology gauge about 2.4% lower.
Markets were jolted this week after AI firm Anthropic unveiled a new legal tool for its Claude chatbot, raising worries over broader disruption to information technology and software service sector. [.N]
“With U.S. tech wobbling, sentiment tend to trickle over to Asian tech as well, particularly after a strong run that left positioning looking stretched,” said Zavier Wong, market analyst at eToro.
“What we’re seeing now feels more like investors de-risking and locking in gains rather than a sign that the broader tech theme is breaking down.”
In Southeast Asia, Indonesia’s Jakarta Composite Index dropped 2% in early trade and the rupiah weakened to 16,885 per U.S. dollar, its lowest point since January 22.
Investor confidence in Indonesia has taken a hit due to growing concerns around policy uncertainty under President Prabowo Subianto, including a widening fiscal deficit and central bank independence.
Foreign investors pulled $1 billion from equities in 2025, according to exchange data. Outflows have accelerated since mid-last week after MSCI warned of a potential downgrade to frontier-market status and Moody’s downgraded the country’s credit rating outlook on Thursday.
“In the near-term, onshore financial markets are likely to witness knee-jerk weakness due to the outlook change, with much onus on the domestic policy response thereafter,” DBS analysts wrote.
“An outlook change doesn’t carry immediate changes in rating-sensitive investment mandates, although there might be lower appetite to build additional exposure, besides a higher preference for shorter-tenor papers.”
Stocks in Malaysia, the Philippines and Taiwan were largely unchanged, while Singapore shares dropped 0.7% and Thailand’s SET Index rose 0.5%.
Among currencies, the South Korean won hovered around 1,470.60 a dollar, its weakest level in more than two weeks, while the Thai baht appreciated around 0.2%.
Thailand is set to hold a general election on Sunday, the same day Japan votes in a snap election called by Prime Minister Sanae Takaichi. A win by Japan’s ruling coalition, as widely expected, could reduce the likelihood of a larger fiscal stimulus.
HIGHLIGHTS:
** Yield on Indonesia’s 10-year benchmark bonds at 6.317%
** Malaysia could raise 2026 economic outlook, AI boom to drive exports, officials say
** Singapore budget may be less generous amid resilient growth
** Thai PM Anutin’s gamble on nationalism to be tested in close election
Asia stock indexes and currencies at 0424 GMT
COUNTRY FX RIC FX DAILY FX YTD % INDEX STOCKS STOCKS
% DAILY YTD %
%
Japan +0.22 -0.02 0.54 7.47
China -0.05 +0.69 0.11 2.81
India +0.11 -0.43 -0.38 -2.24
Indonesia -0.27 -1.19 -2.89 -8.99
Malaysia -0.20 +2.63 -0.14 2.89
Philippines +0.36 +0.40 -0.22 5.21
S.Korea -0.47 -2.11 -2.07 19.99
Singapore +0.10 +0.93 -0.72 6.32
Taiwan -0.09 -0.75 -0.29 9.48
Thailand +0.30 -0.77 0.89 7.82
(Reporting by Sneha Kumar and Roshan Thomas in Bengaluru; Editing by Sherry Jacob-Phillips)
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