Investing.com– Most Asian stocks fell on Friday as growing uncertainty over U.S. interest rates and heightened geopolitical tensions in Iran saw traders steer clear of risk-driven assets.
South Korea was an exception, with the rallying to new peaks on sustained optimism over local markets after a recent technology-fueled rally.
Regional markets took a weak lead-in from Wall Street, which fell in overnight trade amid a swathe of risk-off news. rose 0.16% by 22:37 ET (03:37 GMT), with focus squarely on key inflation and economic growth prints due later in the day.
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Chinese markets remained closed for the Lunar New Year holiday.
Japan falls past soft inflation, Hong Kong slides after 3-day break
Japan’s and indexes were the worst performers in Asia, losing 1.4% and 1.2%, respectively.
Japanese shares fell after some mixed economic prints. Data showed national inflation sinking to a near four-year low in January, while fell but still remained above the Bank of Japan’s 2% annual target.
Separately, data showed factory activity hitting a four-year high in February, aided by strong overseas demand.
Hong Kong’s index fell 0.6% as trade resumed after a three-day break, with local tech names tracking earlier losses in their global peers.
Alibaba Group (HK:) and Baidu Inc (HK:) were among the worst performers on the Hang Seng, sliding between 4% and 6% after the two were briefly mentioned in a U.S. government list of companies with alleged ties to the Chinese military.
BYD Co (HK:), which was also mentioned in the list, fell 1.6%.
Other Asian markets moved in a flat-to-low range. Australia’s fell 0.2%, while Singapore’s index rose 0.1%.
India’s index was flat, with local tech names skittish despite reports of several new artificial intelligence ventures in the country.
Risk appetite remained weak after U.S. President Donald Trump set a deadline of 10 to 15 days for Iran to make a deal on its nuclear program, or risk U.S. action. A host of reports showed Trump considering more strikes against the country.
South Korea outperforms, KOSPI at record high
South Korea’s remained an outlier in Asia, rallying over 1.6% to a record high of 5,768.61 points. The index hit a record high for a second consecutive session.
While a rally in tech had driven the KOSPI’s gains on Thursday, Friday’s record high was fueled by outsized gains in brokerage, defense, and insurance stocks.
Local media reports showed a rush in buying among retail investors, despite broader selling by foreign investors.
South Korea’s top court on Thursday convicted former President Yoon Suk-Yeol to life in prison on charges of an attempted insurrection in late-2024.