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Stock markets across Asia fell on Friday as a widespread retreat from technology companies continued, while Indonesia’s financial assets took a beating following a credit rating agency’s decision to lower its outlook for the nation’s economy.
Korean exchanges saw shares drop for another session as worries about artificial intelligence tools spread through trading floors. At the same time, Indonesia’s main stock index plunged more than 2 percent after ratings firm Moody’s delivered bad news about the country’s financial outlook late Thursday.
An index tracking developing Asian stock markets slipped half a percentage point by midday trading. Korean stocks led the decline, with the country’s main KOSPI benchmark falling 1.7 percent. A separate measure of Asian stocks that leaves out Japanese companies dropped nearly 2 percent at one point during the session.
In Seoul, shares of major chip manufacturers took hits. Samsung Electronics dropped 1.2 percent while SK Hynix edged down 0.2 percent. Those declines pushed a regional technology sector index down roughly 2.4 percent.
AI disruption fears grip markets
Trading desks have been on edge all week after artificial intelligence company Anthropic introduced new legal capabilities for its Claude chatbot. The announcement sparked fears about potential upheaval across information technology and software service industries.
“With U.S. tech wobbling, sentiment tend to trickle over to Asian tech as well, particularly after a strong run that left positioning looking stretched,” said Zavier Wong, market analyst at eToro. “What we’re seeing now feels more like investors de-risking and locking in gains rather than a sign that the broader tech theme is breaking down.”
The technology sector selloff has gone global. Software company shares have tumbled worldwide after Anthropic unveiled Cowork productivity tools aimed at lawyers. In Japan, TIS plunged 16 percent while Trend Micro lost 7 percent of its value. Indian information technology giants TCS and Infosys each dropped more than 7 percent. The Nasdaq 100 index posted its worst three-day stretch since April, with more than $1 trillion erased from technology stock valuations.
SoftBank Group led Japanese technology declines, sliding as much as 7.25 percent. Concerns about artificial intelligence infrastructure spending have spread through Asian trading centers.
Indonesia faces fresh market turbulence
Southeast Asia’s biggest economy faced fresh turbulence Friday. Indonesia’s Jakarta Composite Index fell 2 percent when trading opened. The rupiah currency weakened to 16,885 against the U.S. dollar, hitting its lowest point since January 22.
Market confidence in Indonesia has deteriorated as questions mount about policy direction under President Prabowo Subianto. Traders are increasingly worried about a growing budget deficit and whether the central bank can maintain its independence.
Foreign money managers have pulled $1 billion out of Indonesian stocks so far in 2025, according to exchange records. The exodus picked up speed since the middle of last week after index provider MSCI flagged a possible downgrade to frontier-market status and Moody’s cut the country’s credit rating outlook Thursday.
“In the near-term, onshore financial markets are likely to witness knee-jerk weakness due to the outlook change, with much onus on the domestic policy response thereafter,” DBS analysts wrote. “An outlook change doesn’t carry immediate changes in rating-sensitive investment mandates, although there might be lower appetite to build additional exposure, besides a higher preference for shorter-tenor papers.”
Other markets in the region showed mixed results. Stocks in Malaysia, the Philippines and Taiwan barely moved. Singapore shares dropped 0.7 percent while Thailand’s SET Index climbed 0.5 percent.
Currency markets also showed varied performance. The South Korean won traded around 1,470.60 per dollar, marking its weakest level in more than two weeks. The Thai baht gained roughly 0.2 percent.
Thailand heads to the polls Sunday for a general election. The same day, Japanese voters cast ballots in a snap election Prime Minister Sanae Takaichi called. A victory by Japan’s ruling coalition, which most observers expect, could make a larger government stimulus package less likely.
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