Asian Stocks Decline as US-Iran Tensions Weigh on Markets
Asian stock markets moved lower on Friday as renewed military tensions between the United States and Iran reduced optimism surrounding a potential peace agreement in the Middle East.
Japanese and South Korean markets retreated from recent record highs, while broader regional sentiment weakened following losses on Wall Street overnight.
U.S. markets pulled back after the American military announced it had intercepted attacks targeting three warships in the Strait of Hormuz.
Despite the cautious mood, overall losses remained relatively limited as technology stocks continued to show resilience due to ongoing enthusiasm surrounding artificial intelligence.
S&P 500 Futures traded 0.2% higher during Asian trading hours.
South Korea’s KOSPI Pulls Back After Strong Rally
South Korea’s KOSPI index was among the weakest performers in the region on Friday, falling 1.6% after reaching record highs earlier in the week.
However, the benchmark index remained the strongest-performing major Asian market this week and was still on track for gains exceeding 11%.
The rally was largely driven by strong momentum in semiconductor stocks, particularly major memory chip producers Samsung Electronics and SK Hynix.
Samsung shares dropped 3% on Friday, while SK Hynix fell 1.5% after both companies recorded significant gains earlier in the week.
Losses in SK Hynix remained relatively contained after reports suggested the company was receiving unusually strong demand from major technology firms seeking memory chip supplies for AI infrastructure.
Oil Price Surge Adds Inflation Concerns
Broader Asian markets weakened as escalating military tensions in the Strait of Hormuz increased concerns over energy supply disruptions and global inflation risks.
Oil prices surged sharply on Friday, adding further pressure to investor sentiment as markets worried that prolonged conflict could fuel inflation and hurt economic growth.
The renewed military confrontation also reduced hopes that a long-term peace agreement between the United States and Iran was close.
Japanese Stocks Fall as BOJ Rate Hike Bets Increase
Japan’s Nikkei 225 and TOPIX indexes both fell more than 1% during Friday trading.
Strong wage growth data from Japan also increased expectations that the Bank of Japan could raise interest rates in the near future.
Official data showed that real wages in Japan rose for a third consecutive month in March.
Despite Friday’s decline, the Nikkei index remained on track for weekly gains of roughly 4% following strong post-holiday momentum after the Golden Week break.
Chinese and Australian Markets Also Weaken
China’s Shanghai Shenzhen CSI 300 index fell 0.5%, while the Shanghai Composite slipped 0.2%. Both indexes still remained higher for the week.
Hong Kong’s Hang Seng index declined 1.2% on Friday but was still up nearly 2% for the week thanks to continued gains in technology shares.
Australia’s ASX 200 dropped 1.5% and was largely flat for the week after the Reserve Bank of Australia raised interest rates by 25 basis points and warned that higher inflation could slow economic growth.
Singapore’s Straits Times index fell 0.9%, while futures linked to India’s Nifty 50 traded mostly unchanged.
