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By Sneha Kumar

Feb 12 (Reuters) - South Korean shares hit a record on Thursday on strong chip demand tied to global AI expansion, while Singapore stocks crossed 5,000 for the first time as investors rotated into diversified non-tech plays in Asia.

The MSCI index of emerging Asian equities .MIMS00000PUS rose about 0.7% to a fresh peak, led by South Korea's KOSPI .KS11, which gained 3% to a record.

Chipmakers Samsung Electronics 005930.KS and SK Hynix 000660.KS jumped 6.4% and 3.3%, lifting the benchmark for a fourth straight session.

"AI enthusiasm is clearly back in the driver's seat for Asian chipmakers, with memory pricing firming and capex pipelines still expanding," said Glenn Yin, director of research at brokerage firm ACCM.

Singapore's FTSE Straits Times index .STI also advanced 0.7% to a record 5,021.27, breaching the psychologically important 5,000-point level for the first time, helped by consumer and financial stocks.

Eugene Koh, sales trader at CMC Markets Singapore, said the Singapore rally was largely due to the banking sector, with DBS, OCBC, and UOB near record highs.

Along with the strong financial sector, structural policy reforms, initiatives to improve market structure, and a strong currency have supported foreign returns and confidence in Singapore as a stable regional banking hub, Koh said.

The Singapore dollar SGD= has appreciated nearly 2% this year so far, but was flat on the day, ahead of the outcome of the fiscal 2026 budget.

Elsewhere, Thailand's benchmark index .SETI maintained its election-driven rally to rise 1.9%, sitting near its highest level since mid-December 2024.

Investor confidence has perked up following Prime Minister Anutin Charnvirakul's big surprise win in Sunday's election, raising the prospects of political stability and new policies to deliver growth.

On the other hand, Indonesia equities .JKSE declined 0.7%, snapping three sessions of gains.

The Jakarta market has taken a bruising of late, erasing about $80 billion in market value after index provider MSCI warned of a potential downgrade to frontier-market status, citing transparency red flags in late January.

Meanwhile, stocks in Malaysia .KLSE and Philippines .PSI climbed around 0.2%.

Among Asian currencies, the rupiah IDR= shed the most with a 0.3% drop, while the South Korean won KRW=KFTC appreciated by 0.4% .

The dollar index =USD held steady after an unexpectedly strong January U.S. employment report overnight cooled hopes for near-term rate cuts, keeping traders on edge ahead of Friday's inflation data.

Markets are now pricing a 5% chance of a Federal Reserve interest rate cut at its March meeting, down from about 20% before the jobs data, according to CME's FedWatch Tool.

In Asia, investors will be looking out for fourth-quarter growth data in Malaysia and Taiwan on Friday.

HIGHLIGHTS:

** Yield on Indonesia's 10-year benchmark bonds ID10YT=RR at 6.436%

** Indonesia Stock Exchange to publish share owner list after 'constructive' meeting with MSCI

** Thai consumer confidence rises in January, survey shows

** Thailand GDP growth likely hit over a four-year low in Q4

(Reporting by Sneha Kumar in Bengaluru; Editing by Ronojoy Mazumdar and Nivedita Bhattacharjee)

((Sneha.kumar@thomsonreuters.com))