Asian stock markets relaxed from earlier momentum on Friday as a sell-off in U.S. technology names overnight weighed on investor risk appetite. The decline in the Nasdaq, prompted by a reassessment of high AI-related valuations, reverberated across the region and pressured growth and semiconductor-linked equities.
Traders entered the session digesting the recent sharp rally that had been powered by renewed AI optimism and another round of upbeat corporate earnings earlier in the week. By 22:04 ET (03:04 GMT), U.S. stock index futures were trading largely flat, leaving Asian markets to settle Friday's moves on the back of overnight sentiment shifts.
KOSPI posts fresh record, still set for a hefty weekly gain
South Korea's KOSPI inched up 0.5% on Friday to a new record of 5,558.82 points, even as other regional indexes softened. The benchmark remained on track for a weekly advance of nearly 9%, underpinned by strong performance among top chipmakers.
Samsung Electronics (KS:005930) led gains this week with shares surging nearly 15% as market participants cheered prospects around next-generation HBM4 high-bandwidth memory production and expanding opportunities at the edge of AI computing. Rival SK Hynix Inc (KS:000660) was set to rise roughly 6% for the week, reflecting a similar appetite for semiconductor exposure.
Japan retreats after record highs, still eyeing solid weekly return
In Japan, the Nikkei 225 slipped 0.7% on Friday after having reached record highs above 58,000 points in the prior session. The index was nevertheless poised for a weekly gain of nearly 6%, helped by revived trade optimism following the election victory of Sanae Takaichi and investor expectations that policy continuity and a pro-growth stance would favour exporters and manufacturers.
Japan's broader TOPIX index eased 1% after also touching record highs earlier in the week and was tracking a weekly advance of about 4%.
Mixed moves elsewhere in Asia
Elsewhere, markets showed a mixed picture. Australia's S&P/ASX 200 fell 1.3% on Friday but remained set for a weekly rise of approximately 3%, driven in part by stronger bank earnings. Singapore's Straits Times Index dropped 1% on the day, while futures tied to India's Nifty 50 were trading flat.
Hong Kong was an outlier against the broader weekly trend, with the Hang Seng index tumbling 2% on Friday and leaving the market on pace to finish the week flat. On the Chinese mainland, the blue-chip Shanghai Shenzhen CSI 300 slipped 0.5% and the Shanghai Composite eased 0.7%; both indexes were nonetheless poised to record near 1% gains over the week.
Macro data and rates outlook
Market participants were also awaiting the U.S. consumer price index due later in the day for clues about the Federal Reserve's interest rate trajectory. Strong U.S. jobs data earlier in the week had reduced expectations of near-term rate cuts, adding another layer of uncertainty to risk asset pricing.
Overall, Friday's pullback reflected a recalibration of lofty expectations around AI-driven growth after a rapid run-up, while underlying weekly performance showed that investors still favoured exposure to semiconductors, exporters and select financials.