Asia report: Stocks rebound, but Jakarta tanks on downgrade fears

(Sharecast News) - Asian stocks bounced back on Friday, with investors hunting for bargains after the broad-based tech sell-off the previous session, though Indonesia's market tanked on fears it would be expelled from MSCI's global indices. Japan's Nikkei 225 was up 1.4%, recovering some of Thursday's 4.9% slump, while South Korea's Kospi surged 2.1% following a 7.6% decline the previous day.

Australia's S&P/ASX 200 advanced around 1.0%, Hong Kong's Hang Seng gained 0.5% and mainland China's Shanghai Composite rose 0.2%, while Taiwan's Taiex was up 0.3%.

Markets across the region had dropped sharply on Thursday as AI shares slumped, as investors once again questioned the sustainability of current investment levels into AI infrastructure projects amid rising borrowing costs and heightened competition in the chip industry.

Tech heavyweights SoftBank, Tokyo Electron, Advantest, Samsung Electronics and SK Hynix all did their best to claw back losses on Friday, along with Chinese giants Alibaba, Tencent, Baidu and JD.com.

Away from the major regional indices, however, the Jakarta Composite dropped 11% on Friday, its steepest daily decline since 1998, after index provider MSCI said its emerging-market status was "no longer appropriate" following investor concerns "regarding the investability of the Indonesian equity market".

If Indonesia is subsequently classified as a "standalone market", it would no longer be part of MSCI's main markets, raising the possibility of outflows from emerging markets-focused funds. MSCI said it is now consulting on the possible status downgrade.