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EMERGING MARKETS-Asian equities retreat from record highs as rate-hike bets hit risk assets
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EMERGING MARKETS-Asian equities retreat from record highs as rate-hike bets hit risk assets
Jun 22, 2026 10:49 PM

* South Korea's KOSPI falls over 6%, triggers circuit breaker

* Taiwan's TSMC on track for another record close

* Thai baht hits a 13-month low ahead of policy decision

* Philippine peso poised for sixth session in red

* Rupiah, Jakarta stocks slip, investors await MSCI decision

By Rajasik Mukherjee

June 23 (Reuters) - Asian equities retreated on Tuesday from recent record highs, with

shares in South Korea plunging more than 6% and triggering a temporary trading curb, as

investors rushed out of risk assets on prospects of U.S. interest rate hikes.

The MSCI EM Asia equities index dropped 1.4% from an all-time high on

Monday, dragged lower by declines in South Korea and Taiwan, which together

account for about 60% of the benchmark.

South Korea's KOSPI slumped 6.6%, prompting a volatility-triggered trading halt, as

investors locked in profits after a strong rally in chip stocks.

Shares of major chipmakers Samsung Electronics ( SSNLF ) and SK Hynix fell

between 4% and 6%.

Taiwan's benchmark gauge, another AI-heavy index in the region, slipped 1.2% from an

all-time closing high seen the previous day. TSMC, the world's top contract chipmaker,

was on track for a second consecutive record close.

Meanwhile, traders are grappling with expectations of an accelerated schedule of rate hikes

by a more aggressive U.S. Federal Reserve under the leadership of new Chair Kevin Warsh.

Fed funds futures are pricing in a 75% chance of a rate hike by September, while BofA Global

Research and Deutsche Bank have abandoned prior forecasts of steady policy and now expect the

U.S. central bank to raise rates within the year, citing economic resilience.

"The Fed was perceived more hawkish than expected and markets have reacted by lifting the

USD, against most currencies," said Fiona Lim, senior FX strategist, Maybank Singapore.

"Our house view is for the Fed to stand pat this year and hawkish positioning to unwind,

potentially bringing the USD lower eventually."

The dollar index, which measures the greenback against a basket of major currencies,

edged slightly higher to 101.01, hovering close to the one-year high of 101.13 touched last

week.

The firm dollar weighed on most emerging Asian currencies, which weakened across the board.

The Philippine peso led losses, slipping 0.4% to 61.134 per dollar, its lowest level

since June 12 and on track for a sixth consecutive session of declines.

Thailand's baht shed as much as 0.5% to a 13-month low of 33.095 per dollar, a day

ahead of the central bank meeting. The Bank of Thailand is widely expected to keep its rates

steady, according to a Reuters poll.

Elsewhere, Indonesian markets also came under pressure. Shares in Jakarta fell more

than 1%, while the rupiah weakened to 17,860 per dollar, ahead of MSCI's verdict on the

country's market classification, due in early Asian hours on Wednesday.

The Philippine equity benchmark gauge jumped 1.6%, rebounding from a six-session low

in the previous day. In Malaysia, stocks edged lower, while the ringgit rebounded

from a seven-month low to trade 0.2% higher at 4.138.

HIGHLIGHTS:

** Yield on Indonesia's 10-year govt bonds jumps 8.9 bps to 7.218%

** Philippines cuts 2026 growth forecast, citing graft scandal and energy crisis

** Singapore's DBS Bank prices $2 billion three-year dollar covered bond

** Indonesia plans to embed AI in key programmes, including $15 billion free-meal drive,

document shows

Asia stock indexes and currencies at 0444 GMT

COUNTRY FX FX FX INDEX STOCKS STOCKS

RIC DAILY % YTD % DAILY % YTD %

Japan -0.02 -3.05 -1.62 37.31

China -0.01 +3.10 -0.37 4.50

India -0.01 -5.09 0.11 -7.66

Indonesia -0.20 -6.66 -1.20 -30.11

Malaysia +0.19 -1.98 -0.32 0.91

Philippines -0.23 -3.79 1.61 1.31

S.Korea +0.33 -6.15 -6.02 103.26

Singapore -0.06 -0.63 0.25 12.29

Taiwan +0.07 -0.54 -0.63 63.79

Thailand -0.33 -4.81 -0.74 24.04

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