South Korea experienced a sharp decline in its stock market on Thursday, reaching its lowest point in six weeks, which in turn triggered a sell-off across other emerging Asian markets such as India, Indonesia, and Malaysia. This sell-off was exacerbated by disappointing earnings from U.S. tech companies, leading to a broader equity sell-off in the region.
Notably, South Korean stocks, particularly heavyweights like Samsung Electronics and SK Hynix, faced significant drops amid lackluster second-quarter growth data in the country. Despite the recent outflows within the chip-related stocks in South Korea, Japan, and Taiwan, some analysts believe that the current sell-off may be excessive and that the tech sector weakness is more likely a correction rather than a long-term reversal.
Looking ahead, market participants are closely watching for key economic data releases, such as U.S. second-quarter economic growth figures and personal consumption expenditures (PCE), to gauge the possibility of interest rate cuts later in the year. Futures indicate a 100% likelihood of the Federal Reserve implementing policy easing in September.
In other Asian markets, currencies like the Indonesian rupiah, Singapore dollar, Thai baht, Malaysian ringgit, Indian rupee, and the Chinese yuan experienced various movements against the U.S. dollar. The Indonesian rupiah dropped to a two-week low, while the Singapore dollar remained steady despite financial stock declines. The Thai baht retraced its gains, Malaysian ringgit and Indian rupee slightly advanced, and the Chinese yuan strengthened to a six-week high.
Furthermore, due to adverse weather conditions, markets in Taiwan, the Philippines, and the Philippines remained closed for the second consecutive day.
