Asian equities traded mixed on Friday but were on track for significant weekly losses as escalating conflict in the Middle East and a surge in oil prices weighed on investor sentiment.
Wall Street futures were largely flat during Asian hours after U.S. stock indexes extended losses overnight. The ongoing conflict involving Iran, Israel, and the United States entered its seventh day with no signs of easing, raising concerns about potential disruptions to global energy supplies, particularly through the Strait of Hormuz—a key passage for roughly one-fifth of the world’s oil.
Crude oil prices have jumped more than 15% this week as traders factored in risks of supply disruptions from the region, putting additional pressure on Asian equities and currencies, especially in major oil-importing economies such as South Korea.
South Korea’s KOSPI fell 1%, marking a nearly 12% drop for the week. Japan’s Nikkei 225 edged up 0.6% but remained on track for a 6% weekly decline. In China, the Shanghai Composite and the CSI 300 were set to fall over 1% for the week. Hong Kong’s Hang Seng rose 2% on Friday but faced a 3% weekly drop.
Inflation Concerns and Policy Outlook
The spike in oil prices has fueled worries about rising inflation, potentially complicating monetary policy decisions for major central banks such as the Federal Reserve. Higher energy costs can feed into broader price pressures, making policymakers more cautious about near-term interest rate cuts.
Investors are also focused on key U.S. economic data, including the February nonfarm payrolls report due later on Friday, which could influence the outlook for U.S. interest rates and global financial markets.
In other Asian markets, India’s Nifty 50 edged lower and was set for a 2% weekly decline. Australia’s S&P/ASX 200 slipped 1%, while Singapore’s Straits Times Index traded flat.
