*

South Korean stocks slumps 6.2%, worst since August last

year

*

MSCI EM Asia down 2.6%, worst since April

*

South Korean won hits lowest level since mid-April

(Updates for afternoon trade)

By Roshan Thomas and Sameer Manekar

Nov 5 (Reuters) -

Asian equities saw their sharpest drop in months on

Wednesday, led by a 6% plunge in South Korea, as investors

pulled back from overheated tech stocks on valuation worries,

though most markets later pared losses.

The MSCI index of emerging Asia equities and

a broader index tracking Asia equities excluding Japan

were down over 1% in their worst intraday

decline since the early April "Liberation Day" tariff turmoil.

Shares slid after the CEOs of Morgan Stanley ( MS ) and

Goldman Sachs ( GS ) cast doubt on whether the recent AI-fueled

rally and record-high valuations could be sustained.

Traders hit regional markets hard early on Wednesday,

with South Korea's KOSPI seeing its steepest intraday

fall since August last year before closing just above the key

4,000 level.

The KOSPI has surged a staggering 80% since April, with more

than a third of the gains coming last month. Chipmaker Samsung

Electronics has risen 90% this year, while peer SK

Hynix has more than tripled.

Those gains have firmly positioned the index among the

top-performing equity markets globally this year.

Taiwan's benchmark index has advanced 20% this year,

driven mostly by a 40% rally in TSMC shares.

But it all came to a head on Wednesday as caution over an

overheated rally, stretched valuations, a reassessment of Fed

cuts and caution from Wall Street bigwigs triggered the steepest

sell-off in months.

"This isn't a broad market crash but more of a healthy

recalibration in overheated sectors," said Tareck Horchani, Head

of Dealing, Prime Brokerage at Maybank Securities.

"While short-term sentiment may remain fragile, we expect

the market to stabilize as earnings normalize and macro

visibility improves, particularly if U.S. rate guidance or China

demand provide a clearer backdrop".

On Wednesday, South Korea's KOSPI fell 6.2% to drop

below the psychologically key 4,000 level, marking its worst

intraday decline since August last year. The benchmark index

ended the session down 2.9%.

The South Korean won extended losses, weakening

0.7% to its lowest point since mid-April.

Taiwan's stocks shed 2.6% to fall by the most in

three weeks. Its dollar weakened for the sixth

consecutive session to hit its lowest point since early May.

In Southeast Asia, Singapore's FTSE Straits Times index

slipped more than 1%, while Malaysia's KLCI lost

0.6%. Stocks in the Philippines shed 1.8%.

Most currency markets in the region were largely on the back

foot against a steady U.S. dollar.

The Philippine peso lost 0.5% and the Indonesian

rupiah inched 0.2% lower, continuing to hover around a

six-week low.

HIGHLIGHTS:

** Yield on Indonesia's 10-year bonds ticks

higher to 6.166%

** China eyes $4 billion dollar bond, term sheet shows,

orders top $65 billion

** Indonesia Q3 GDP growth slows slightly to 5.04% ahead of

end-year stimulus measures

Asia stock indexes and currencies at 0719 GMT

COUNTRY FX RIC FX DAILY FX YTD % INDEX STOCKS STOCKS

% DAILY YTD %

%

Japan +0.02 +2.30 -2.50 25.86

China India -3.43 8.26

- -

Indones -0.15 -3.77 0.32 16.78

ia

Malaysi +0.12 +6.63 -0.14 -1.29

a

Philipp -0.48 -1.22 -0.83 -10.89

ines

S.Korea Singapo +0.01 +4.43 -0.34 16.37

re

Taiwan -0.16 +5.90 -1.42 20.33

Thailan +0.03 +5.34 -0.15 -7.39

d