Asian stock markets were mixed on Friday as gains in Chinese equities helped offset continued weakness in Japan and South Korea.
Semiconductor shares remained under pressure, while investors stayed cautious ahead of the closely watched U.S. jobs report. The data could play an important role in shaping expectations for the Federal Reserve’s September policy decision.
Wall Street Mixed Ahead of US Jobs Data
U.S. stocks ended the previous session mixed after fresh economic data pointed to continued resilience in the labor market.
Initial jobless claims remained below 200,000 for a third consecutive week. Meanwhile, second-quarter productivity growth came in stronger than expected.
The data added to uncertainty surrounding the Federal Reserve’s next move, particularly as policymakers continue to assess inflation and employment conditions.
In Asian trading, Nasdaq 100 futures gained around 0.1%, while S&P 500 futures were broadly flat.
Investors are now focused on the July U.S. nonfarm payrolls report for further clues on the outlook for interest rates.
South Korean Chip Stocks Extend Losses
Technology and semiconductor stocks remained under pressure as investors continued to reassess elevated valuations linked to the artificial intelligence boom.
South Korea’s KOSPI fell around 0.8%, extending its weekly decline to more than 5%.
The benchmark was on course for a seventh consecutive weekly loss and has fallen during eight of the past 10 trading sessions.
Investors have continued reducing exposure to AI-linked semiconductor companies following the sector’s strong first-half rally.
SK Hynix dropped more than 4%, extending its sharp weekly decline.
Samsung Electronics, however, recovered nearly 1% after suffering heavy losses earlier in the week. LG Innotek fell around 1%.
AI Valuation Concerns Weigh on Semiconductor Sector
Weak reactions to earnings from several U.S. semiconductor companies have also hurt sentiment.
Investors are increasingly questioning whether near-term earnings growth can justify the high valuations reached by many AI-related companies.
Spending on artificial intelligence infrastructure remains strong, but concerns over valuations have increased after the sector’s rapid rebound from last month’s selloff.
Nikkei Slips as Japanese Tech Stocks Fall
Japan’s Nikkei 225 declined around 0.3% on Friday.
Despite the drop, the benchmark remained on track for a weekly gain of roughly 1%. The broader TOPIX index performed better, rising around 0.3%.
Japanese technology stocks were among the weakest performers.
Kioxia Holdings fell more than 5%, while Murata Manufacturing dropped over 4%. TDK Corp declined around 1%.
Fujifilm Shares Plunge
Fujifilm Holdings became one of the biggest decliners in the region, falling nearly 18%.
The sharp move came after the company said it was considering a partial spinoff of its imaging business.
The announcement triggered a strong negative reaction from investors and placed additional pressure on Japanese equities.
Chinese Stocks Outperform Asian Markets
Mainland Chinese equities performed better than most other markets in the region.
The CSI 300 gained around 1%, while the Shanghai Composite advanced approximately 0.8%.
Technology stocks also strengthened. BOE Technology gained around 1.5%, while NAURA Technology climbed approximately 1.4%.
Hong Kong’s Hang Seng Index, however, slipped around 0.1%.
Alibaba and Tencent each fell approximately 0.2%.
Hong Kong Insurers Remain Under Pressure
Insurance and financial stocks in Hong Kong continued to struggle.
Reports earlier in the week indicated that Chinese authorities had begun enforcing taxes on investment income generated through offshore insurance policies.
The development weighed on companies exposed to the sector.
Prudential fell around 1%, while Standard Chartered declined by more than 1%.
Singapore Stocks Rise on Strong Bank Earnings
Singaporean equities outperformed several regional markets.
The FTSE Straits Times Index gained around 0.9%, supported by another round of strong banking results.
DBS Group was up roughly 2.7% for the week after reporting record quarterly earnings.
OCBC gained more than 2.5% during the week and reached a record high following its results.
UOB moved in the opposite direction, falling around 1.7% after releasing its latest earnings.
India and Australia Trade Lower
Elsewhere in Asia-Pacific markets, India’s Nifty 50 slipped around 0.2%.
Australia’s S&P/ASX 200 also edged lower, declining approximately 0.1%.
Overall regional sentiment remained cautious as traders awaited the U.S. payrolls report and continued to monitor weakness in technology stocks.
Oil Prices Rise on Strait of Hormuz Risks
Oil prices also strengthened as geopolitical tensions remained in focus.
Reports suggested that Iran was considering legislation that could restrict U.S., Israeli and other vessels from travelling through the Strait of Hormuz.
Fresh threats from Yemen’s Houthi movement against Saudi Arabia added to concerns over potential risks to regional energy supplies and shipping routes.
The developments came despite signals from officials in Washington and Tehran that an agreement concerning the strategic waterway could be getting closer.
For now, Asian markets remain divided between stronger Chinese equities and continued pressure on technology-heavy markets in Japan and South Korea.
