Bangkok shares drag on Delta Electronics' sell-off; S.Korea stocks soar on AI rally

• Indonesian stocks set for fourth straight weekly gain
• South Korean shares at record high
• Delta Electronics leads Thailand stocks lower

By Rishav Chatterjee

Oct 10 (Reuters) - Thai equities slumped more than 2% on Friday, weighed by a sharp sell-off in Delta Electronics after the stock was placed under exchange surveillance, while South Korean markets touched record highs, riding a fresh wave of artificial intelligence optimism.

Thai stocks .SETI fell as much as 2.2%, and was set for its weakest trading session since late June. The dip was led by a more than 11% drag in Delta Electronics Thailand DELTA.BK, the country's most valuable stock.

The selloff followed the stock exchange's decision to impose surveillance measures after a staggering 22% rally this month. The gains had been driven by mounting excitement around Delta's strategic position as a key supplier of components for AI data centers.

Broadly, the MSCI index of emerging Asian equities .MIMS00000PUS slipped 0.4%, retreating after a modest gain on Thursday. The broader MSCI Asia-Pacific ex-Japan index .MIAPJ0000PUS also declined 0.3%.

Stocks in Malaysia .KLSE and Indonesia .JKSE fell 0.2% and 0.3% respectively, while Singapore .STI posted marginal losses. The benchmark index in the Philippines .PSI also traded in the red, shedding 0.2%.

The mood mirrored a subdued session on Wall Street, where U.S. stocks closed lower as investors grappled with the absence of new economic data or directional cues. Major indexes pulled back from record highs reached earlier this week.

In stark contrast, South Korean equities rallied as traders returned from an extended holiday, with enthusiasm for AI-related chip stocks propelling gains. The benchmark Kospi .KS11 jumped as much as 1.9%, reaching a historic high.

Semiconductor giants led the charge, with Samsung Electronics 005930.KS surging 5.96% to its highest level since January 2021, while SK Hynix 000660.KS soared 9.23%, buoyed by a sustained wave of AI-driven demand.

But the Korean won KRW=KFTC weakened, hitting a five-month low.

Indonesian shares .JKSE were poised for a fourth consecutive weekly gain, underpinned by strong local bond demand and the surprise rate cut by Bank Indonesia earlier this month aimed at boosting growth.

"After the BI's unexpected rate cut this month, the central bank maintained a clearly dovish bias by prioritising growth, providing room for the government bonds to rally further," DBS Bank senior economist Radhika Rao said.

"Strong demand from domestic players has helped to offset foreign portfolio outflows as investors remained concerned over the fiscal and political economy developments."

Emerging Asian currencies were choppy against the U.S. dollar, which nudged lower. The Thai baht THB=TH was slightly lower, while the Malaysian ringgit MYR= and Indonesian rupiah IDR= fell 0.1% and 0.2%, respectively. The Philippine peso PHP= added 0.4%.