Emerging Asian equities surrendered some gains in afternoon trading on Wednesday amid lingering concerns around the durability of the AI rally and competition from Chinese rivals to Korean chipmakers.
Regional chipmakers struggled to find a footing after a global semiconductor selloff, as investors evaluated the impact of higher bond yields on hefty AI-related spending as reports about technological advances by China's CXMT called into question Seoul's competitive edge in memory chips.
South Korea's benchmark equity gauge erased early gains to end the day 0.4% in the red, its sixth consecutive session of losses. Samsung Electronics ended flat, while SK Hynix fell 1.7%. The KOSPI has shed around 35% since its June record high.
"The next phase of AI investing could become more selective. Investors may increasingly distinguish between companies benefiting from a temporary supply-demand imbalance and those with more defensible technology, customer relationships and long-term pricing power," said James Ooi, chief market strategist at Tiger Brokers.
Taiwan stocks held on to gains to close up 0.6%, after a 2% slump in the previous session. TSMC ended unchanged ahead of its earnings on Thursday, where the world's largest contract chipmaker is expected to post a sixth consecutive quarter of record profit.
Singapore shares held steady, while its dollar edged lower, after the city-state's central bank kept its monetary settings unchanged in a surprise move.
MSCI's EM Asian equities index was up 0.2% after advancing 1.3% earlier in the day.
On the currency front, the Taiwan dollar depreciated by 0.2%, losing nearly 1.5% over five sessions to trade near mid-August lows.
Weakness in the currency could persist in the near-term if Treasury yields and the US dollar index remain elevated alongside foreign investors continuing to reduce exposure to Taiwanese equities, said Lukman Leong, chief analyst at brokerage Doo Financial Futures.
Leong attributed the recent declines to broad dollar strength, rising geopolitical tensions and high oil prices, in addition to heavy foreign selling of Taiwan stocks.
The South Korean won appreciated 0.2% after notching a two-year peak on Monday.
The Indian rupee hit a one-month high of 95.06 per US dollar, bolstered by hawkish remarks from the central bank chief and pledges of ensuring currency stability following a series of support measures.
The MSCI EM currencies gauge edged 0.2% higher in Asian trade. Traders await US consumer price index data due later in the day for cues on the Federal Reserve's interest rate outlook.
HIGHLIGHTS:
** Singapore economy grows 5.4% year-on-year in third quarter, preliminary data shows
** China's September exports soar, putting $1 trillion trade surplus in sight
** Thailand central bank chief says no need for rate cut now - Reuters
