Asian emerging market equities plunged on Friday as traders trimmed risk exposure following ambiguous US employment data that clouded the Federal Reserve's policy path, while regional currencies held steady.
The MSCI Emerging Markets Asia Index dropped 2.7%, erasing Thursday's 1% gain and heading for its worst week since April 4. On that date, the index had fallen 6% after former US President Trump announced new tariffs.
Singapore's Straits Times Index declined over 1%, with utilities firm Sembcorp Industries leading losses at 3.2%. Bangkok stocks slid 1.9% to their lowest since September 5, while Kuala Lumpur shares dipped 0.2%.
The sharp reversal in sentiment stemmed from concerns over stretched valuations and rising tech expenditures, which overshadowed the rally driven by Nvidia's bullish outlook and stronger-than-expected US September jobs data.
However, rising US unemployment and downward revisions to prior months' figures created uncertainty about the Fed's potential rate cut next month.
"The best explanation for today's selloff is monetary policy uncertainty," said Kyle Rodda, senior analyst at Capital.com. "While rate cut odds edged up, markets still price in a toss-up decision for December."
South Korea's KOSPI plummeted 4.2% early, wiping out its previous session's 3.5% Nvidia-fueled gain. The index closed down 3.8%, bringing its weekly loss to nearly 4% - its worst performance since late February. Heavyweights Samsung Electronics and SK Hynix plunged 6.1% and 10% respectively.
"In Korea, Samsung and SK Hynix face intense pressure as the memory chip rally now confronts potential supply-side shifts," noted Maybank Securities' Tareck Horchani.
Taiwan's tech-heavy index sank 3.6% on Friday, with TSMC dropping 4.8%, contributing to a 3.5% weekly decline - the worst since early April.
Indonesia's stock market slipped 0.2% as the central bank held rates steady as expected, prioritizing transmission of prior cuts amid renewed rupiah weakness that complicates further easing. The rupheid gained 0.1%.
Regional currencies were mixed against a weaker US dollar. The Malaysian ringgit rose 0.2%, while the Taiwan dollar fell 0.5% to its weakest since May 2. The South Korean won declined 0.2%, with most other regional currencies little changed.
