HSBC drops 'overweight' call on EM equities on AI spending fears

HSBC has dropped its overweight rating on emerging market equities, citing concerns over debt-backed AI spending and the sustainability of AI-driven returns. MSCI's EM Asia index slid over 2 percent, with South Korea's KOSPI falling 5.35 percent and entering bear market territory, down more than 20 percent from its late-June record. HSBC simultaneously upgraded eurozone equities to overweight, expecting lower growth expectations and a weaker euro to support the region.