BENGALURU/SINGAPORE (July 25): South Korean shares fell to their lowest in six weeks on Thursday, leading declines among broader equities in emerging Asia, after lacklustre earnings from US tech firms triggered a wide sell-off among regional peers.

South Korean stocks declined 1.8%, with heavyweight chipmakers Samsung Electronics and SK Hynix sliding 2% and over 9%, respectively.

Data showing an unexpected shrinking of South Korea's second-quarter growth also fuelled the sell-off.

"While today's weaker-than-anticipated out-turn raises the risk of an earlier Bank of Korea (BOK) move, we think other considerations, including a weak currency and rising house prices, will keep the BOK cautious," Krystal Tan, Asia economist with ANZ, wrote in a note.

MSCI's index of Asia emerging markets equities, which has Samsung Electronics and SK Hynix among its top 10 constituents, slipped 0.8% to its lowest since mid-June.

Although chip-related stocks in South Korea, Japan and Taiwan have seen massive outflows over the past few sessions, following sharp gains through the year, analysts believe the ongoing sell-off might be overdone.

"I think tech weakness is more of a correction than a permanent reversal," said Ben Bennett, Asia-Pacific investment strategist at Legal and General Investment Management.

"I like the structural story still, plus ... South Korea and Taiwan should benefit from lower US yields and a weaker dollar, particularly if it allows local central banks alsoto cut rates in the coming months."

Among macroeconomic data awaited on Friday were figures on second-quarter US economic growth and personal consumption expenditures (PCE) - the Fed's favoured measure of inflation - to validate traders' bets of interest rate cuts this year.

Futures now imply a 100% chance of the Federal Reserve easing policy in September.

The Indonesian rupiah slipped 0.3% to 16,265 per dollar, its lowest in two weeks, with equities declining 0.6% in their third successive day of losses.

In Singapore, the dollar hovered near its prior close, although equities were down 1%, as financial stocks took a hit ahead of Friday's monetary policy meeting.

The Monetary Authority of Singapore (MAS) is widely expected to keep policy settings unchanged.

Elsewhere, the Thai baht slipped 0.4%, erasing gains from the prior session, and equities fell to a three-week low. The Malaysian ringgit and the Indian rupee added a few pips, while the Chinese yuan strengthened 0.3% to a six-week high.

Markets in Taiwan and the Philippines were closed for a second successive day due to bad weather.

  - Reuters