Asia Stocks Slip Friday, But Wrap Up a Strong Week on Trade and AI Optimism
Most Asian equities declined on Friday, yet remained on track for solid weekly gains, driven by renewed enthusiasm around U.S. trade developments and the artificial intelligence sector.
Markets in the region took a mixed lead from Wall Street, where both the S&P 500 (US500) and Nasdaq Composite (IXIC) reached fresh record highs in an otherwise quiet session. However, the optimism sparked by strong earnings from Alphabet (NASDAQ: GOOGL) appeared to be fading.
S&P 500 futures ticked up 0.2% during Asian trading hours.
Japan and Hong Kong Lead Weekly Advances
Japanese stocks led the region, surging to near all-time highs earlier in the week after Tokyo and Washington finalized a trade agreement. Despite a slight pullback on Friday—where the Nikkei 225 and TOPIX indexes each fell between 0.5% and 0.6%—both indices gained over 4% for the week. The TOPIX hit a record high on Thursday, while the Nikkei hovered just below peaks last seen in July 2024.
Tokyo’s inflation data for July showed a slightly larger-than-expected cooling in consumer prices. However, core inflation remained above the Bank of Japan’s 2% target, leaving markets uncertain about the central bank’s next policy moves.
Hong Kong’s Hang Seng index dipped 0.7% on Friday but still posted a 3.3% weekly gain, buoyed by strong tech sector performance. The rally was fueled by hopes that Nvidia (NASDAQ: NVDA) would resume chip sales to China—a key driver for AI-related stocks.
Although enthusiasm around artificial intelligence remained a market driver—especially after Alphabet’s upbeat results—investors appeared to be taking a more cautious approach as tech momentum slowed.
Asian Markets Lose Steam but Stay Positive for the Week
Overall, most major Asian benchmarks retreated Friday but remained in positive territory for the week.
China’s CSI 300 and Shanghai Composite indexes slipped 0.4% and 0.2%, respectively, though both were still up more than 2% over the week. Investor focus is now turning to the upcoming Politburo meeting, expected in late July, for further signals on economic policy.
South Korea’s KOSPI bucked the trend, rising 0.3% on Friday after a batch of encouraging corporate earnings. However, the index’s weekly performance was relatively flat, up just 0.3%, as uncertainty looms over potential trade deals with the U.S.
Australia’s ASX 200 dropped 0.5% on Friday and was down nearly 1% for the week. The decline was driven by profit-taking following recent record highs and mixed messages from the Reserve Bank of Australia regarding the timing of future interest rate cuts.
Singapore’s Straits Times Index fell 0.4% after notching several record highs earlier in the week, though it still ended up 1.4% for the week—marking its fifth consecutive week of gains.
India’s Gift Nifty 50 futures rose 0.1%, but the underlying Nifty 50 index struggled to stay above the 25,000 mark as underwhelming earnings from large firms like Infosys (NSE: INFY) weighed on sentiment.
