The key facts

  • Seoul (+2.1%) and Tokyo (+1.4%) clawed back Thursday's losses, supported by chipmakers SK hynix and Kioxia
  • CoreWeave shares rose almost 6% after Jensen Huang's comments about the company's improving financial position
  • The Jakarta index crashed more than 11% — its worst fall since 1998 — after MSCI's decision

Recovery after the selloff

Most Asian markets rebounded on Friday after the previous day's tech-sector rout, triggered by concerns over the sustainability of the AI boom. Seoul gained 2.1% to 5,668.05 and Tokyo 1.4% to 65,324.29, even though on Thursday these indices had lost 7.6% and 4.9% respectively. The rally was supported by chipmakers SK hynix and Kioxia. Markets in Hong Kong, Shanghai, Singapore, Taipei, Mumbai, Bangkok and Manila also rose.

Causes of the selloff

The selling was triggered by US inflation data that exceeded forecasts and boosted bets on Fed rate hikes, as well as concerns about the financial health of data-center operator CoreWeave because of its enormous debt. The New Jersey company, which had borrowed large sums to buy expensive Nvidia chips, plunged 15.5% on Wednesday amid rising yields on some of its bonds.

Huang's words lifted the market

On Thursday, Nvidia chief Jensen Huang defended CoreWeave in a Bloomberg interview: 'CoreWeave's strength grows every day. I am optimistic. Their cost of capital is actually coming down.' CoreWeave shares rose almost 6%. SPI Asset Management analyst Stephen Innes noted that Huang's defense 'pulled the NeoCloud complex off the floor' and revived the market. Susannah Streeter of Wealth Club added that Huang 'justified his company's investment in cloud provider CoreWeave, saying its situation is improving'.

Warsh: AI will change the economy, but the path will be 'bumpy'

Fed chief Kevin Warsh, speaking at IMF and World Bank meetings in Bangkok, called AI 'the most significant change' in the world economy in his lifetime. In his words, the AI investment boom will lift prices in the short term, but 'in the long run there is enormous benefit for the world economy and the US economy.' He warned that 'the path from the current point there will probably be very bumpy — bumpy in terms of our understanding of the technology, bumpy because we really don't know what the market structure of these new technologies will be.'

Jakarta crash over MSCI

The Jakarta index crashed more than 11% — its biggest fall since 1998 — after MSCI said that keeping Indonesia's emerging-market status was 'no longer justifiable,' sparking fears of foreign investment outflows. Earlier this year MSCI had noted investors' complaints about 'persistent opacity in the structure of share capital' and coordinated trading activity distorting price discovery. The authorities said changes had been made, but MSCI reported that investors had pointed to the absence of sustained sufficient progress in the Indonesian stock market.

Europe and quotes

European markets, which have fewer tech giants, rose in mid-session trading: DAX +1.0% to 25,640.45, CAC 40 +0.4% to 7,967.05, FTSE 100 +0.1% to 10,849.95 (an earlier AFP version reported London down 0.3%). The Dow in New York closed up 1.1% at 52,177.69. Brent traded around $106.19 (+0.3%), WTI at $97.62 (−0.4%); the euro rose to $1.1257, and the dollar fell to 157.92 yen.