VINACHEM

Emerging Asian markets got swept up in the global equities storm Friday, with Thai and Indonesian stocks teetering on the brink of a bear market as President Donald Trump’s latest tariff threats sent risk assets reeling.

Thailand’s benchmark equity index fell as much as 2.4%, taking its drop from an October high to over 20%. Indonesia’s market also edged toward bear territory, with its central bank pledging strong intervention after the rupiah hit a five-year low. 

“Trump tariffs threats are obviously on everyone’s mind and sentiments are fragile throughout, with the rebound in the dollar,” said Kok Hoong Wong, head of institutional equities sale trading at Maybank Securities Pte.

Asian stocks and currencies are grappling with a double blow: the uncertainty surrounding Trump’s trade policies and concerns over the Federal Reserve’s rate path. The specter of higher tariffs and sluggish global demand is weighing heavily on Thailand’s export-driven economy, while Indonesia — despite net bond inflows — faces growing capital flight.

Indonesia to Strongly Intervene as Rupiah Drops to Five-Year Low

Friday’s turmoil follows Trump’s declaration of further tariffs on China, along with plans for levies on Mexico and Canada in the coming week. The fresh duties on Chinese goods are stoking fears of an escalating trade war between the world’s two biggest economies, while economists warn that tariffs could push Mexico and Canada toward recession.

“Unfortunately, Trump pushing hard on tariff against China, Canada, Mexico and likely more to come, raises inflationary pressure in US and thus rates-higher-for-longer, thus we see the USD spike,” said Xin-Yao Ng, a fund manager at abrdn. That’s “putting pressure on markets with more vulnerable currencies including several countries in Asean like Indonesia especially.”

The Bloomberg Dollar Spot Index has gained 0.7% this week.

As trade tensions ripple through emerging economies, investors are pulling out, leaving a trail of losses.

Global funds have continued to sell Thai stocks, making the nation Asia’s worst performing equity market in 2025, with nearly $10 billion in outflows over the last two years. They have net sold $934 million of Indonesian shares in February, putting the country on track for a fifth straight month of outflows, according to Bloomberg-compiled data.

“The tariff outlook has casted a pall on Southeast Asian stocks,” said Nirgunan Tiruchelvam, an analyst at Aletheia Capital. “More importantly, the strong dollar is weighing on the region’s assets alongside some local woes.”  – Source: Bloomberg