Asian stocks bounce: KOSPI up 2.8%, Nikkei 1.8% after AI selloff, Indonesia down 11% on MSCI blow

Asian stock markets recovered on Friday 16 October 2026 after Thursday's sharp selloff in AI and chip shares. South Korea's KOSPI rose 2.8% after a fall of nearly 8% the day before, and Japan's Nikkei gained 1.8% after losing almost 5%, Business Recorder reported, carrying a Reuters market report. The exception was Indonesia, whose main index slumped 11%.

How Asian markets moved on Friday

What caused Thursday's rout

The trigger was CoreWeave, the US company that rents out AI computing power. Its shares fell 15.5% on Wednesday after questions about its debt, and the slide continued early Thursday on reports that its bond yields had reached levels usually seen on distressed debt. That raised a wider worry about how the AI building boom is being paid for, and chipmakers in Seoul and Tokyo took the heaviest hit. Memory makers came under extra pressure after China's ChangXin Memory Technologies reported progress on a next-generation DRAM design. CoreWeave's shares recovered some ground on Thursday, and Friday's bounce followed.

We covered Thursday's fall as it happened: KOSPI trips circuit breaker after 8% fall.

Indonesia's MSCI shock

Indonesia's benchmark lost 11% after index provider MSCI said the market no longer merits emerging market status and prepared to remove it from a range of products that global funds track. Funds that follow those indexes must sell, so a downgrade like this usually pulls foreign money out. The rupiah weakened about 0.8% against the dollar.

What it means for Pakistan

• KSE-100: the index stood at 166,186 points at the last reading on our KSE-100 page, the same as the reading before, as the Seoul and Tokyo chip selloff passed Karachi by. The KSE-100 has few technology shares, so AI swings reach it mostly through oil and foreign flows.
• Gold: international gold slipped 0.4% to $4,154.51 an ounce after a 1.6% gain on Thursday. Our gold rate page shows Rs 433,875 a tola for 24K on 16 October, up Rs 1,350 on the day. Convert a jewellery weight with the tola to gram converter.
• Oil: Brent eased 0.4% to $105.51 a barrel and US crude 0.6% to $97.43, on reports Washington may lift sanctions on some "shadow fleet" tankers to cool record freight rates. Pakistan's petrol price was cut by Rs 3.63 to Rs 390.23 a litre from today (our story).
• Dollar: the dollar index sat near 102, off Wednesday's 18-month high near 103. In Pakistan the dollar rate was Rs 276.92 at the latest reading.

Bonds and currencies

Bond markets steadied after Treasury yields dropped sharply on Thursday as investors moved into safer assets. The euro rose to $1.1217, sterling held at $1.3278 and the dollar traded around 158 yen.