Asian stocks have dropped on Friday, with rising uncertainty around the US interest rates and rising geopolitical tensions. The worst performers are Nikkei 200 and TOPIX, whereas KOSPI in South Korea outperforms
Investing.com- The majority of Asian stocks dropped on Friday as uncertainty surrounding US interest rates and rising geopolitical tensions in Iran made investors cautious about investing in high-risk, high-reward securities.
However, in South Korea, the situation was entirely different, as the KOSPI rose to new peaks on sustained optimism about local markets following a recent technology-driven rally.
On the other hand, the regional markets took a weak lead from Wall Street, which also dropped overnight amid widespread risk of a sell-off. Hong Kong also dropped after a 3-day break.
S&P Futures increased by 0.16% by 22:37 ET(03:37 GMT), with major focus on economic growth and key inflation prints expected later in the day.
Japan fell due to soft inflation in early 2026, and the Nikkei 225 and TOPIX indexes were the worst performers in Asia by losing 1.4% and 1.2%, respectively.
The decrease in Japanese shares is due to some mixed economic prints. The data indicated that the national consumer price index inflation slid to a near four-year low in January. The core inflation also fell, but remained above the Bank of Japan’s annual target of 2%. While the purchasing managers index data also revealed that factory activity stood at a four-year high in February, encouraged by strong international demand.
In Hong Kong, the Hang Seng index dropped by 0.6% as trade restarted after a three-day break, with local tech companies performing lower than their global peers.
The worst performers included Alibaba Group (HK: 9988) and Baidu In (HK:9888), dropping between 4% and 6% after the mentions of these companies within the list of companies having association with the Chinese military. BYD Co (HK:1211), another company mentioned in the list, slid by 1.6%.
The other markets in Asia moved in a flat to low range, as in Australia ASX200 dropped by 0.2%, while the Straits Times index in Singapore rose by 0.1%.
India’s Nifty 50 was found to be flat despite the reports of multiple new AI ventures within the country.
Read: Gold Slips Below $5,000 as Strong US Dollar Caps Gains
After U.S. President Donald Trump’s 10 to 15-day ultimatum to Iran regarding the nuclear deal and potential U.S. repercussions, the continued weakness in market interest and risk was evident. Many speculators have also been cautious in supporting aggressive postures by President Trump as he considers additional airstrikes against Iran.
Excellent Performance of KOSPI
The South Korean KOSPI index continued to outperform all other indices in Asia and increased by 1.6% to a record-setting 5,768.61 points. The KOSPI has now established two consecutive record highs.
The rally that took place on Thursday was primarily due to the strong performance of technology stocks, but on Friday, the KOSPI’s new record-high was primarily supported by very large gains in the brokerage, defense, and insurance sectors.
In addition to the above performance, it was reported by many local news sources that retail investors were very active in the market and were continuing to purchase shares, while foreign investors were more inclined to sell shares.
The South Korean Supreme Court convicted former President Yoon Suk-Yeol of attempted insurrection in late 2024 and sentenced him to life imprisonment.
