*
U.S. futures imply 95% chance of October rate cut
*
Shares in Taiwan, Seoul, Singapore hit record highs
*
Malaysia stocks highest since January
*
Currencies trading in a tight range
(Updates for afternoon trade)
By Rishav Chatterjee
Oct 2 (Reuters) - Stocks in South Korea, Taiwan, and
Singapore scaled records on Thursday and broader emerging Asia
equities hit multi-year highs, fueled by AI-related frenzy and
softer U.S. jobs data that stoked bets of another Federal
Reserve rate cut this month.
The MSCI EM Asia Index climbed as much as
1.8% to its highest level since June 2021, marking a fourth
straight day of gains.
A broader gauge of equities in Asia excluding Japan
hit its highest level since March 2021.
"Most markets in Asia remain substantially cheaper than
their counterparts in the West. That, plus evolving investor
mindset about risk exposures, bodes well for most of the
region's stock markets in our view," said analysts at DBS in a
note.
South Korean chipmakers Samsung Electronics (SSNLF) and
SK Hynix (HXSCF) surged 3.5% and 9.9%, respectively, after
they secured a deal to supply memory chips for OpenAI's data
centres, highlighting how the global race for computing power is
fuelling semiconductor demand.
In Taiwan, the benchmark jumped 2% to a fresh
record, with chipmaker TSMC leading the rally on a 3%
gain.
Seoul's KOSPI advanced 3.2% to a new high, supported
by September exports that rose at their fastest pace in 14
months.
Optimism spilled over to other markets in the region.
Singapore's benchmark gained 1.9% to a fresh high, with
underlying strength in big banks boosting DBS shares
by 2.7%.
Malaysia and Indonesia added 0.9% and 0.4%.
The former traded at its highest since early January.
Emerging Asian currencies, however, remained range-bound,
pressured by the U.S. government shutdown.
Traders are pricing in potential Fed rate cuts as U.S.
labour market data signalled a slowdown, a dynamic that lifted
tech and chip stocks on Wall Street and spilled over into Asia.
Futures now imply a 95% chance of a Fed rate cut in October,
up from 90% a day earlier, with a 75% probability of another
move in December..
However,
subdued 2026 growth expectations
for EM could cap currency gains, even as stronger fiscal
balances and policy credibility provide some support, cautioned
Phoenix Kalen, managing director and global head of emerging
markets research at Societe Generale.
Softer EM growth, she noted, contrasts with a brighter
U.S. outlook, limiting the "pull" factors for EM FX while
leaving room for strength on the rates side.
The U.S. dollar regained some footing. The South Korean
won, the Thai baht and the Philippine peso
were flat. The Taiwan dollar rose 0.2%.
HIGHLIGHTS
** Indonesian 10-year benchmark flat at 6.321%
** POLL-Investors broadly bullish on Asian currencies;
rupiah, rupee most shorted
** China and India markets closed for public holidays
Asia stock indexes
and currencies at
0703 GMT
Japan -0.09 +6.79
0.87 14.32
China India -3.47 5.04
--
--
Indonesi -0.06 -3.13 0.43 14.10
a
Malaysia +0.02 +6.28 0.86 -0.46
Philippi -0.06 -0.14 0.23 -7.49
nes
S.Korea Singapor -0.02 +6.01 1.73 16.11
e
Taiwan +0.16 +7.83 1.52 14.51
Thailand -0.06 +5.73 1.30 -7.76
(Reporting by Rishav Chatterjee in Bengaluru; Editing by
Subhranshu Sahu and Janane Venkatraman)
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