Updates for afternoon trade

By John Biju

Dec 18 (Reuters) - South Korean and Taiwan equities led Asian stock markets lower on Thursday, as concerns over artificial intelligence-related investments and profits drove investors away from tech stocks.

An MSCI index of emerging Asian equities .MIMS00000PUS, in which South Korea and Taiwan make up 40% of the index, declined 0.3% to hover near a three-week low hit on Tuesday.

Stocks in South Korea .KS11 closed 1.5% lower as concerns over frothy AI valuations weighed. Chipmaker Samsung Electronics 005930.KS fell 0.3%, while battery maker LG Energy Solution 373220.KS tumbled 8.9%.

The South Korean won KRW=KFTC, which has been hovering around 16-year lows, weakened 0.3%, prompting officials to ratchet up warnings against speculative moves.

Equities in Taiwan .TWII fell as much as 0.6% before closing 0.2% lower, ahead of a central bank decision at 0800 GMT.

Economists surveyed by Reuters expect the central bank to maintain its policy stance citing the strong performance of the economy, which is booming on AI demand.

In Southeast Asia, equities in the Philippines .PSI declined 0.8%, while those in Singapore .STI retreated 0.2%.

"Although emerging market equities are, in some places, very heavily exposed to the AI boom, we think they would in aggregate hold up better than those in the U.S. if that boom continued to unwind," Thomas Mathews, head of markets, Asia Pacific at Capital Economics, said in a note.

However, he said if concerns about AI became a panic, Asian equities would probably still be hit hard, even where AI exposure was not high.

Indonesian equities .JKSE slipped 0.4%, while the rupiah IDR= declined to its weakest point since November 21. The rupiah has fallen more than 3% this year, making it one of the worst performers in the region.

Bank Indonesia kept its policy rate unchanged on Wednesday for a third straight meeting, focusing on maintaining the stability of the currency.

"Policymakers continue to count on transmission to ease financial conditions," said Radhika Rao, DBS Bank senior economist.

"While the central bank is likely to retain its dovish language, we expect ammunition to be preserved in light of firmer momentum in domestic activity towards late 2025."

In Thailand, equities .SETI fell for a third session, while the baht THB=TH seemed to be facing resistance around 31.46 per dollar after strengthening more than 3% since mid-November.

The Bank of Thailand cut interest rates by 25 basis points on Wednesday to support a slowing economy hit by multiple challenges including a strong baht THB=TH.

On Thursday, the central bank chief said they were proposing the finance ministry to control gold trading after a surge in transactions helped drive up the value of the baht and added that monetary policy could be further eased if needed.

HIGHLIGHTS:

** Japan, US discuss potential projects for $550 billion US-bound investment package

** US approves $11.1 billion arms package for Taiwan, largest ever

** Japan's premier says country must pursue proactive spending for growth

** India's parliament approves bill to raise foreign direct investment in insurance to 100%

By John Biju

Dec 18 (Reuters) - South Korean and Taiwan equities led losses among Asian markets on Thursday, as investors exited technology stocks on concerns over whether extravagant AI-related spending and investments would translate into sustainable profits.

An MSCI index of emerging Asian equities .MIMS00000PUS declined 0.6% and hovered around a three-week low hit on Tuesday. Stocks in South Korea .KS11 and Taiwan .TWII, which make up 40% of the index, dipped 2% and 0.6%, respectively.

Chipmaker Samsung Electronics 005930.KS fell 2%, while battery maker LG Energy Solution 373220.KS tumbled 7.8%.

Taiwan Semiconductor Manufacturing 2330.TW, the world's biggest contract chipmaker, declined 0.4%.

Taiwan's central bank is set to decide on its monetary policy later in the day. Economists surveyed by Reuters expect the central bank to maintain its policy stance citing the strong performance of the economy, which is booming on AI demand.

In Southeast Asia, equities in the Philippines .PSI slipped 0.4%, while those in Singapore .STI retreated 0.2%.

"Although emerging market equities are, in some places, very heavily exposed to the AI boom, we think they would in aggregate hold up better than those in the U.S. if that boom continued to unwind," Thomas Mathews, head of markets, Asia Pacific at Capital Economics, said in a note.

However, he said if concerns about AI became a panic, Asian equities would probably still be hit hard, even where AI exposure was not high.

Indonesian equities .JKSE slipped, while the rupiah IDR= declined to its weakest point since November 21. The currency has fallen more than 3% this year, making it one of the worst performers in the region.

Bank Indonesia on Wednesday kept its policy rate unchanged for a third straight meeting, focusing on maintaining the stability of the currency.

"Policymakers continue to count on transmission to ease financial conditions," Radhika Rao, DBS Bank senior economist, said.

"While the central bank is likely to retain its dovish language, we expect ammunition to be preserved in light of firmer momentum in domestic activity towards late 2025."

In Thailand, equities .SETI fell for a third straight session, while the baht THB=TH seemed to be facing resistance around 31.47 per dollar after strengthening more than 3% since mid-November.

The Bank of Thailand cut interest rates by 25 basis points on Wednesday to support a slowing economy hit by multiple challenges including a strong baht THB=TH.

The baht has firmed about 9% against the dollar this year, which is not favourable for the tourism and export-reliant economy.

On Thursday, the central bank chief said they were proposing the finance ministry to control gold trade in the country, a major gold trading hub.

HIGHLIGHTS:

** Thai economy facing multiple issues, central bank chief says

** US approves $11.1 billion arms package for Taiwan, largest ever

** Japan's premier says country must pursue proactive spending for growth

By Karen Lema

MANILA, Dec 10 (Reuters) - Strong demand for products from the region's high-tech economies and India's faster-than-expected growth have improved the outlook for developing Asia and the Pacific for this year and the next, the Asian Development Bank said on Wednesday.

Growth in 2025 is now projected at 5.1%, up from the 4.8% forecast in September, the ADB said in an update to its Asian Development Outlook, and higher than the 4.9% projection it made when it first released the report in April.

It also raised its 2026 growth forecast for the region to 4.6% from 4.5%, citing reduced trade uncertainty after several U.S. deals.

The region consists of 46 economies ranging from China and India to Georgia and Samoa, but excluding Japan, Australia and New Zealand.

"While regional growth is expected to moderate next year, export strength, underpinned by the upturn in the AI and electronics cycle, will help to sustain economic activity, alongside lower trade uncertainty," the ADB said.

"Possible re-escalations of tariffs and trade policy uncertainty, and intensification of financial market volatility, remain significant downside risks for the outlook," it added.

Subregional prospects have also improved, with South Asia now expected to grow 6.5% this year, up from a previous forecast of 5.9%, with India beating forecasts to grow 8.2% in its fiscal second quarter ending in September.

Southeast Asia is expected to expand 4.5% this year, up from 4.3% previously, with growth to inch up to 4.4% in 2026, but the ADB said risks from global uncertainties, climate-related disruptions, and domestic political developments still remain.

Recent events underscore these vulnerabilities, with severe flooding across Indonesia, Thailand, and Malaysia in late November killing hundreds and displaced millions.

Meanwhile, fighting between Thailand and Cambodia has also reignited, with renewed border clashes and airstrikes this week, derailing a fragile ceasefire brokered by U.S. President Donald Trump after five days of warfare in July.

China's 2025 outlook edged up to 4.8% from 4.7%, still below Beijing's target of 5.0%, while the 2026 projection remained unchanged at 4.3%, reflecting the continued weakness in the country's property market.

"The persistent property sector downturn continued to weigh on activity, with a sharper decline in property investment pulling fixed asset investment down and slowing infrastructure and manufacturing investment," the ADB said.

Inflation is forecast to ease to 1.6 in 2025 from 1.7% projected in September, before rising to 2.1% in 2026, the ADB said.

(Reporting by Karen Lema; Editing by David Stanway)