Asian stock markets largely retreated on Friday, driven by further weakness in technology shares and investor caution ahead of key political and central bank developments in the region.
Global sentiment was weakened by another sharp move lower in US technology stocks, with traders on the continent taking cues from Wall Street. S&P 500 futures were down 0.2% as of 21:55 ET (02:55 GMT). The session in the United States was notable for a steep drop in Amazon.com (NASDAQ:AMZN), which plunged as much as 11% after investors reacted to the company’s large spending forecast for 2026.
Asian markets with heavy technology exposure recorded some of the largest losses. South Korea’s KOSPI fell 1.7%, while Hong Kong’s Hang Seng lost 1.3%. Singapore’s Straits Times declined 0.7% and futures for India’s Nifty 50 slipped 0.1% as traders awaited the outcome of a Reserve Bank of India meeting, where the central bank is widely expected to leave interest rates unchanged.
Mainland Chinese equities were comparatively stable, with the Shanghai Shenzhen CSI 300 and the Shanghai Composite trading in a narrow range and showing little net movement over the session.
Japan steadies ahead of election
Japan’s Nikkei 225 and TOPIX bucked the broader regional decline, each advancing by about 0.7% as the market turned its focus to a national election scheduled for Sunday. Polling ahead of the vote indicated that Prime Minister Sanae Takaichi’s party appeared likely to secure a decisive victory, strengthening its position in the lower house.
Polling suggested the party could reach a super-majority of 310 seats out of 465 in the lower chamber. That level of dominance could make it easier for the government to push through fiscal measures without being blocked in the upper house, potentially smoothing the path for further budget revisions and increased public spending.
Takaichi has pledged additional fiscal support and tax reductions designed to ease the burden of rising living costs on households. While the prospect of more fiscal stimulus had been received positively by equity markets, the same outlook provoked a sell-off in Japanese government bonds amid concerns over already high public debt levels.
Australia slips after hawkish RBA comments
Australia’s ASX 200 was the weakest performer across Asia, sliding as much as 2% following remarks by Reserve Bank of Australia Governor Michele Bullock. Addressing lawmakers on Friday, Bullock described domestic demand as stronger than expected and noted tighter capacity conditions as ongoing factors supporting inflation.
Her comments came days after the central bank implemented its first rate hike in two years. Bullock said the RBA would need to take further steps to cool domestic demand to bring inflation under control. The remarks were widely interpreted as hawkish, prompting an increased sell-off in Australian shares amid market concern over the possibility of additional rate increases this year. Market pricing reflected expectations for at least one more hike in 2024.
Overall, the session highlighted persistent sensitivity in equity markets to movements in technology stocks, central bank commentary, and political developments. Investors remain attentive to how these forces will shape policy and market conditions in the coming weeks.