BY COMFORT OGBONNA
Shares across Asia delivered a mixed performance on Friday as investors balanced optimism in some sectors against mounting concerns over heavy investments in artificial intelligence and the growing risk of conflict between the United States and Iran. The uncertainty left major benchmarks drifting in different directions, reflecting fragile market sentiment. Oil prices extended their rally, climbing to their highest levels since early August as both Washington and Tehran signaled readiness for confrontation if negotiations over Iran’s nuclear programme collapse.
The prospect of escalating tensions in the Middle East—home to critical global energy supply routes—has injected fresh volatility into global markets. In Japan, the Nikkei 225 fell 1.1% to 56,825.70. Financial stocks led the decline, pressured by concerns that private credit firms heavily exposed to companies vulnerable to artificial intelligence disruption could face mounting stress. Major lender Mitsubishi UFJ Financial Group dropped 2.2% after its partner, U.S.-based private credit firm Blue Owl Capital, slid 5.9% overnight. Investors fear that as AI reshapes industries, companies unable to adapt could struggle to service debt, creating ripple effects for lenders. Other heavyweight Japanese stocks also retreated.
Toyota Motor Corporation declined 3.7%, while Sony Group Corporation fell 3.2%, reflecting broad-based selling in cyclical and technology-related names. In Hong Kong, the **Hang Seng Index** lost 0.8% to 26,481.67 as trading resumed after Lunar New Year holidays. However, mainland Chinese and Taiwanese markets remained closed, limiting regional participation. South Korea stood out as a bright spot. The KOSPI surged 2.3% to a record 5,808.53, driven largely by defense contractors.
Shares of Hanwha Aerospace jumped 6.4% amid expectations of sustained increases in global military spending. Heightened geopolitical risks worldwide have boosted demand for defense equipment, supporting the sector. Elsewhere in the region, Australia’s S&P/ASX 200 slipped 0.1% to 9,081.40. India’s BSE Sensex rose 0.7%, while Thailand’s SET index fell 0.7%, underscoring the uneven tone across Asian markets. Overnight on Wall Street, U.S. benchmarks closed lower. The S&P 500 fell 0.3%, the Dow Jones Industrial Average dropped 0.5%, and the Nasdaq Composite slipped 0.3% to 22,682.73. Technology-driven disruption fears continued to weigh on companies seen as vulnerable to AI-powered competition.
Booking Holdings sank 6.1% despite reporting quarterly profits that exceeded expectations. Investors remain wary that AI-enhanced platforms could reshape the travel booking industry. The company’s shares have lost roughly a quarter of their value this year. Similarly, Carvana fell 7.9% even after posting stronger-than-expected earnings. Meanwhile, Walmart fluctuated sharply, initially rising 2.7% before sliding 1.4%. Although the retail giant reported solid quarterly results, its forward profit outlook disappointed investors. Energy stocks were among the strongest performers, tracking rising crude prices. A barrel of U.S. benchmark crude gained 1.9%, with Brent crude also climbing 1.9%. Early Friday, U.S. crude added another 31 cents to $66.71 per barrel, while Brent rose 35 cents to $72.01 per barrel. Higher oil prices boosted shares of Occidental Petroleum, which surged 9.4% after reporting better-than-expected quarterly profits. Rising energy costs could complicate the policy outlook for the **Federal Reserve**.
Policymakers have indicated they want clearer evidence that inflation is easing before considering further interest rate cuts this year. Elevated oil prices risk reigniting inflationary pressures, potentially delaying monetary easing. Economic data offered a mixed picture. A report showing fewer U.S. workers applying for unemployment benefits suggested the labor market remains resilient. Meanwhile, manufacturing activity in the mid-Atlantic region accelerated, though the U.S. trade deficit widened more than economists anticipated in December, adding another layer of uncertainty. In currency markets, the U.S. dollar strengthened to 155.09 Japanese yen from 154.99 yen.
The euro dipped to $1.1763 from $1.1775. Gold prices rose 0.8%, silver gained 1.4%, and Bitcoin climbed 1.1% to nearly $68,000, reflecting continued investor interest in alternative assets amid geopolitical and economic crosscurrents. Overall, markets remain caught between optimism about economic resilience and concern over geopolitical tensions and rapid technological change. With AI investment risks and Middle East developments dominating headlines, volatility could remain elevated in the sessions ahead.
Original article
Comments