Asian stock markets retreated on Friday as momentum in technology names cooled and oil prices climbed amid persistent geopolitical frictions. Markets tracked losses from Wall Street, where tech stocks that had propelled recent gains came under renewed pressure.
Trading in the region remained sensitive to developments in the Middle East. Negotiations between Washington and Tehran were described as stalled, and continued disruptions in the Strait of Hormuz kept crude trading above $100 per barrel - a dynamic that pushed inflation concerns back onto investors' radars and curbed demand for higher-risk assets.
President Donald Trump announced an extension of the ceasefire between Israel and Lebanon, and U.S. stock index futures rose in Asian trading following that announcement. Still, the move provided only limited relief for markets that had been buoyed in recent sessions by gains in AI-linked and heavyweight technology stocks.
Regional market moves
South Korea's KOSPI index eased 0.4% to 46,452.29 points, after hitting a record high of 6,557.56 points in the prior session. The benchmark was set to jump more than 4% for the week, supported by strength in large chipmaking companies.
In China, the Shanghai Composite slipped 0.5%, while the blue-chip Shanghai Shenzhen CSI 300 fell 0.6%. Hong Kong's Hang Seng traded 0.5% lower, and the HSTECH sub-index dropped 1%.
Japan's market showed a mixed picture. The Nikkei 225 rose 0.4% after reaching a record high on Thursday, while the broader TOPIX edged down 0.1%. For the week, the Nikkei 225 was on track for a 1.5% gain, aided by technology sector advances and corporate earnings.
Elsewhere in the region, Singapore's Straits Times Index declined 0.8%, Australia's S&P/ASX 200 dipped 0.5%, and futures tied to India's Nifty 50 were trading 0.4% higher.
Japan inflation and the central bank outlook
New government data showed Japan's core consumer prices, which exclude fresh food, rose 1.8% year-on-year in March, up from 1.6% in February. Despite the uptick, inflation remains below the Bank of Japan's 2% target. The BOJ is scheduled to meet next week and is expected to keep interest rates unchanged, though reports suggest the central bank may indicate a readiness to raise rates in the future.
The combination of higher oil prices and still-subtarget inflation in Japan presents a nuanced backdrop for policymakers and investors - supporting some upward pressure on costs while leaving monetary policy settings largely intact for now.
Overall, regional markets struggled to sustain the recent rally that had been driven by artificial intelligence-linked stocks. Elevated geopolitical risks and oil-induced inflationary pressures weighed on risk sentiment and limited the upside for equities at the end of the trading week.