Key facts
- Asian stocks rose Friday, recovering from Thursday's sharp sell-off.
- Indonesia's stock market was downgraded by MSCI, triggering a significant one-day fall.
- Fed Chair Kevin Warsh and BoE Governor Andrew Bailey made comments at IMF/World Bank meetings.
Asian stocks advanced Friday, with bargain hunters likely leading the buying after a sharp plunge in markets on Thursday. The calm returned after a frenzied AI-centered selling a day earlier, but its longevity is uncertain. The spike in yields for AI cloud provider CoreWeave, which stoked fears about the mounting debt pile financing the AI boom, remains a concern. Progress by China's CXMT on next-gen DRAM architecture has also degraded confidence in established manufacturers like SK Hynix and Micron. South Korea's KOSPI rose around 3% following Thursday's nearly 8% plunge, and Japan's Nikkei was 1.5% higher after dropping some 5% in the prior session. US and European stock futures also edged higher. Indonesia was an outlier, with shares recording their biggest one-day fall since 1998 after index provider MSCI announced the stock market no longer merits "emerging market" classification, setting up a downgrade that will force passive funds to pull money from the country. With tech earnings rolling out over coming weeks, analysts expect volatility to stay elevated, compounded by the picture around interest rates at the US Federal Reserve and other major central banks. Treasury yields have found a floor after Thursday's plunge as investors rushed to sovereign debt. Fed Chair Kevin Warsh spoke at IMF/World Bank meetings in Bangkok on Friday, stating he does not prejudge policy meeting outcomes. Bank of England Governor Andrew Bailey commented earlier on Friday that soaring energy prices due to the Iran war had so far had limited impact on wider inflation in Britain, but it was too soon to draw firm conclusions.