On Friday (Feb 6), South Korean equities continued to fall as investors pulled back from tech stocks. Meanwhile, Indonesian shares dropped over 2% following Moody's decision to lower the country's credit rating outlook, dealing a blow to Southeast Asia's largest economy.

The MSCI index for emerging Asian equities slipped 0.5%, driven by a 1.7% decline in South Korea's KOSPI index. A broader index of Asian equities excluding Japan also fell by nearly 2%.

In Seoul, chipmakers Samsung Electronics and SK Hynix saw declines of 1.2% and 0.2% respectively, contributing to a 2.4% drop in the regional information technology index.

This week, markets were shaken by the unveiling of a new legal tool for the AI firm Anthropic's Claude chatbot, raising concerns about potential disruptions in the information technology and software service sectors.

Zavier Wong, a market analyst at eToro, commented, "With US tech stocks showing signs of instability, Asian tech stocks are also affected, especially after a period of strong performance that had stretched investor positions."

Elsewhere in Southeast Asia, Indonesia's Jakarta Composite Index fell by 2% in early trading, while the rupiah weakened to 16,885 per US dollar, hitting its lowest level since January 22.

Investor confidence in Indonesia has been eroded by concerns over policy uncertainty under President Prabowo Subianto, including a growing fiscal deficit and questions about central bank independence.

Foreign investors withdrew $1 billion from Indonesian equities in 2025, with outflows accelerating since MSCI raised the possibility of a downgrade to frontier-market status and Moody's revised the country's credit rating outlook.

DBS analysts noted, "In the short term, onshore financial markets in Indonesia are expected to experience weakness due to the revised outlook, with a focus on the domestic policy response going forward."

Stocks in Malaysia, the Philippines, and Taiwan remained relatively stable, while Singapore shares declined by 0.7% and Thailand's SET Index increased by 0.5%.

Among currencies, the South Korean won hovered around 1,470.60 against the dollar, its weakest level in over two weeks, while the Thai baht appreciated by 0.2%.

Thailand is preparing for a general election on Sunday, coinciding with a snap election in Japan called by Prime Minister Sanae Takaichi. A victory for Japan's ruling coalition, widely anticipated, could reduce the likelihood of a major fiscal stimulus.