Taiwan shares rally as state supports; S Korean equities extend loss

Taiwan's stock market experienced a rally on Monday following the government's activation of the National Financial Stabilization Fund after an AI-linked selloff wiped out trillions of dollars from global markets. The benchmark stock index surged 4.9 percent, marking its best performance since a record drop in 2001. Tech giant TSMC, the world's top contract chipmaker, saw its shares climb up to 7.3 percent.

Analysts, however, cautioned that the recovery is not yet definitive, citing ongoing concerns about AI investments and infrastructure amidst the potential implications of a Democratic victory in the US midterms. The Taiwanese government intervened with the stabilization fund and curbed short-selling to stabilize the market, and some early buyers were seen taking advantage of the situation.

While the extent of fund utilization remains unclear, Taiwan's economy ministry expects AI demand to continue its upward trajectory. Meanwhile, South Korea's benchmark Kospi index extended its losses, dropping 0.8 percent, deepening a nearly 12 percent decline from last week. The Kospi has shed over 46 percent from its June high.

The South Korean won strengthened by over 1 percent against the US dollar, while the US dollar firmed after strong US jobs data fueled expectations of higher interest rates. Philippine equities faced pressure due to a slowdown in economic growth for the fifth consecutive quarter, with the Bangko Sentral ng Pilipinas raising interest rates by 125 basis points since April, including a significant 50-basis-point hike last month, to combat inflation amid slowing growth.

Indonesian stocks gained around 0.8 percent ahead of MSCI's November index review, but optimism was dampened by concerns over the country's inclusion in MSCI's emerging-market benchmarks.