Indonesian shares reached a record high, while most emerging Asian bourses gained on Monday on hopes of a U.S. rate cut in December, though advances were capped by policymakers' split views and fears of an overstretched AI-led rally.
The MSCI emerging Asia stock index rose 0.6%, rebounding from Friday's 3% drop. Indonesia's benchmark index rose as much as 1% to its record level.
Local ride-hailing firm GoTo advanced around 2% after announcing the resignation of its executive chief and nomination of the replacement.
Taiwan shares climbed 0.3% while stocks in Thailand rose 0.2%. Top U.S. Federal Reserve official John Williams on Friday said rates could fall "in the near term", raising market bets for a cut in December.
Fed funds futures now point to a 57% chance that the U.S. central bank will cut by 25 basis points next month, up from less than a 30% chance a week ago. Other officials, such as Fed Boston President Susan Collins, remain apprehensive about cutting interest rates in December.
Meanwhile, shares in Seoul reversed course to slip 0.2% as investors remained concerned about a persistent weakness in the South Korean won. The won depreciated 0.3% for the day after having declined around 9.6% from its strongest level so far this year in June.
Persistent fears of overvaluation in the AI sector had prompted a pullback in tech-heavy Asian indexes such as South Korea's, which rely heavily on the growing demand for semiconductor chips while a 43-day government shutdown in the United States also lowered investors' risk appetite.
"If some of the above investor concerns continue to weigh on U.S. equities and risk sentiment, we think Asia stocks will also be vulnerable," said Chetan Seth, a financial analyst at Nomura.
Stocks in Singapore added 0.6%, while its currency was largely unchanged after October inflation figures came in higher than anticipated.
Last week, the city-state upgraded its economic outlook for 2025 after the third-quarter gross domestic product beat market expectations and initial estimates.
Meanwhile, Philippine stocks erased earlier losses to rise 0.4%, on track for their fourth consecutive session of gains.
Asian currencies were largely on the back foot, with the Philippine peso and Thai baht leading the declines, each down around 0.3%.
HIGHLIGHTS:
** South Korea sees room for cooperation with Taiwan on U.S. chip tariffs, trade minister says
** China says Japan sent 'shocking' wrong signal on Taiwan
** Thai central bank wants weaker baht, sees room to cut rates, chief says - Reuters
